Bord Gáis post €30m operating loss despite €870m rise in parent company profits

Last year, Bord Gais' parent company, Centrica, posted record-high profits amid an ongoing energy crisis, reporting earnings of €3.7bn for 2022.

Bord Gáis recorded an operating loss of €30m in the first six months of 2023 which it says is a "direct consequence" of pricing pressures in the retail supply market.

That is in spite of its parent company, UK-based Centrica, seeing adjusted operating profits for the first half rising by more than €870m.

Posting profits of €40m in the same period last year, Bord Gáis said its retail side "continued to be challenged in the first six months of the year," but was partially offset by the impact of continued strong availability from the Whitegate CCGT and a solid trading performance.

However, in its half-year report, Centrica's operating profit increased from £1.34bn (€1.56bn) to £2.08bn (€2.43bn).

The energy giant's Irish arm, which controls more than 40% of the residential gas market in the Republic, said that despite market conditions, it was confident in yielding positive results in the long term.

Drop in customers

Despite its large market share, Bord Gáis lost 12,000 customers since last year, reflecting a drop of 2%, with the company attributing the decline to its "reduced focus on customer acquisition against the challenging market backdrop." 

The energy provider also reported a rise in consumer complaints, reflecting "continuing market-wide customer concerns over higher bills."

Despite its operating loss, Bord Gáis reported a gross segment revenue of £1.04bn in the first half of this year, with an adjusted gross margin of £46m, down from £97m in the same period in 2022. 

Record-high Centrica profits

Last year, Bord Gáis' parent company posted record-high profits amid an ongoing energy crisis, reporting earnings of €3.7bn for 2022.

However, the company, which also owns Whitegate power station in Cork and British Gas in the UK, said it made a loss on its Bord Gáis retail business, blaming the "higher bad debt and lower customer consumption from warmer weather" and insisted that it was running its Irish business efficiently.

In addition, the company absorbed €60m in losses in its residential supply business in the Republic, adding that it "shielded customers from some of the worst increases in energy prices".

With 514,000 Bord Gáis customers in the Republic, down from 526,000 last year, the record profits of its parent company put the spotlight back on the operations of energy giants, especially after wholesale energy prices started fell from their peaks last summer.

Following its operating loss, managing director of Bord Gáis, Dave Kirwan said the provider "recognises the need to support vulnerable customers," adding that it had established an energy support fund which has provided €2m to vulnerable customers in the first six months of this year.

Mr Kirwan also noted the work that has commenced on two "state-of-the-art, hydrogen-ready, 100MW flexible" gas peaking plants in Athlone and Dublin, with these projects representing "a significant investment of over €300m."

"Bord Gáis Energy remains committed to providing reliable and affordable energy solutions for our customers," Mr Kirwan concluded. "Despite the challenges posed by market conditions, we are confident that our strategic investments and customer-centric approach will continue to yield positive results in the long term."