Centrica Reports Record Profits

UK energy giant Centrica has reported record profits of £1.1bn, just a few weeks after massive price hikes were announced on its consumer energy bills.

More than half of the company's profits are from its residential arm British Gas, which supplies gas and electricity to households across the UK.

Operating profits at British Gas rose by 83 percent to £571m, mostly made in the first part of 2007 following additional gas supplies from European gas pipelines.

"New pipelines from Norway and the Netherlands, which were underpinned by long-term gas contracts with British Gas, began to bring additional gas to the UK and helped to bring down wholesale gas prices at the start of the year," says Centrica CEO Sam Laidlaw.

However, a rise in wholesale prices together with oil prices reaching record highs resulted in a "necessary" raise in customer tariffs, the company says.

In a BBC interview, Laidlaw said the company would use the profits to reduce the UK's growing reliance on imported gas, referring to a £1bn-a-year investment in new sources of gas and power.

By Ozge Ibrahim