Energy giant chief defends dividends from huge profits amid prices crisis

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SCOTTISH Gas owner Centrica’s chief executive has defended bringing back dividends for shareholders amid the spiralling energy crisis.

Chris O’ Shea was speaking to reporters after the company’s half-year profit soared five-fold to £1.3 billion when it was stoked by rocketing energy prices.

The company said it would start paying dividends to shareholders for the first time since 2020 as its oil and gas arm turned a huge profit.

Centrica said its upstream business, which includes its North Sea operations, saw adjusted operating profit reach £906 million in the first six months of the year.

Mr O’Shea, Centrica chief executive, was asked if he should use some of the cash to help customers who are facing bills of more than £3,800 from January, and he said that by running British Gas prudently he is saving customers more money.

READ MORE: Parkmead predicts record gas profits 

Without buying its energy in advance, Centrica would have seen a hit of around £4.4bn, he said. “I know it’s difficult to see the word profits, or dividends, or similar words when people are having a tough time. I’m very conscious of this,” Mr O’Shea said.

“Bear in mind, over the next couple of years we are expecting to pay a windfall tax of probably well over £600m on our UK gas business off the back of the profits that we’re seeing, so a lot of this is going back into society.”

The profit hike comes from the company’s nuclear and oil and gas business, not British Gas.

The supply business performed less spectacularly as its profits hit just £98m, down 43% set against the same period last year, before the energy crisis gripped.

It comes as one forecast by BFY said the increase in the wholesale gas price sparked by Russia could mean costs hit £3,420 for the average dual-fuel tariff, before leaping again in January to £3,850.

Mr O’ Shea said: “We are very aware of the difficult environment many customers are facing and we will continue supporting them. 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.”

Centrica also said: “We continue to believe we need to see significant change to address the underlying issues in the UK’s complex energy regulations, by simplifying and strengthening regulations to protect customers and to ensure a crisis of this sort never happens again.”

Shares in Centrica closed down 2.14p, or 2.35%, at 88.84p.

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