Centrica PLC (LSE:CNA) reinstated its dividend for the first time since the pandemic after increasing underlying group earnings 143% in the first half and said the outlook for full year 2022 "remains positive".
The owner of British Gas reported adjusted EBITDA of £1.66bn for the six months to the end of June, compared with £682mln in the first half of last year, on the back of soaring energy prices.
The energy supplier reinstated its dividend for the first time since 2019, despite incurring a statutory operating loss for the period due to costly derivative energy contracts in the wake of rising gas prices.
It declared an interim dividend per share of 1p, saying it would reinstate its progressive dividend to shareholders and “retain our historic policy to pay roughly one third of the full year dividend as an interim”.
Centrica said it had “strong upstream volumes against a backdrop of higher commodity prices” during the first half of 2022 as it dealt with “increased commodity volatility”.
UK gas prices have risen 270% in the past year, according to the UK Natural Gas Futures benchmark price, and spiked this week after Russian state energy company Gazprom said it would cut supply to Germany through the Nord Stream 1 pipeline.
Centrica is investing more than £100mln in customer service, support and pricing in 2022 to help customers get through the energy crisis.
It reported strong exploration and production and nuclear volumes and said it improved net promoter scores, a measure of customer loyalty, in British Gas Energy and British Gas Services & Solutions.
The energy supplier also completed the sale of Spirit Energy Norway and the Statfjord field for US$1.1bn, reducing its decommissioning liabilities by £800mln.
Centrica generated £643mln of total free cash flow from continuing operations and improved its net cash position to £316mln at the end of June, up from a debt of £93mln a year earlier.
However, operationally it made an operating loss in the first half following remeasurements of derivative energy contracts and tax liabilities after the price of gas surged.
Centrica's statutory operating loss was almost £1.1bn for the period, compared to an operating profit of £1bn last year.
Its statutory loss includes a “£1.9bn loss on net remeasurements after taxation”, it said, adding that in one remeasurement it was lumbered with an increase in an onerous energy supply contract provision of nearly £1.87mln.
“We have a clear strategy to continue improving operational performance, to grow our business and to position ourselves to deliver net zero at a cost which helps the many, not the few. We are committed to investing in the energy transition which will improve the security of energy supply in our core markets,” said Chris O’Shea, group chief executive of Centrica.
Its share price lifted in early trades before dropping 0.70% this morning.