Centrica profits rise by 80%

British Gas owner Centrica's residential profits rose 80% in the first half of the year

British Gas owner Centrica announced an 80% rise in profits at its residential arm, but the firm said further cuts in domestic bills were far from certain.

Centrica reported residential operating profits of £299 million for the six months to June 30, up from £166 million in the same period last year as a cold snap in January and February and falling wholesale costs helped boost performance.

The effect of price hikes in 2008 "more than offset" lower consumption per customer during the period as revenues rose 15% to £4.38 billion.

But lower wholesale prices hit profits for the whole Centrica business, which were down 5% to £936 million.

British Gas Residential increased prices last year as the wholesale cost of gas soared - although the division did not pass on the full rise, leading to a 69% drop in profits last year.

The firm made a 10% reduction in the standard gas tariff from February and a similar cut in electricity prices in May.

The profits rise at the residential division led to calls for energy firms to make further cuts to their energy tariffs.

But while Centrica said wholesale costs had continued to fall in the period, the firm could not say whether bills would see further cuts.

Chief executive Sam Laidlaw said: "That is obviously a difficult question to answer. There are a number of big variables.

He said factors like world prices and the potential for a repeat of the Ukrainian crisis of last winter - where a dispute between the country and Russia led to gas supplies for much of Europe being shut off for weeks - would have an impact on which direction bill prices would go.