Direct Energy Profit Up 5% in 2012 as New President and CEO Appointed

Direct Energy Profit Up 5% in 2012 as New President and CEO Appointed 
Strong organic and acquisitive customer growth and continued operational 
efficiencies drive positive results 
HOUSTON, Feb. 27, 2013 /CNW/ - Direct Energy, North America's largest 
competitive energy and energy-related services company, today announced an 
operating profit of US$526 million (C$526 million, £331 million) for the full 
year 2012. Direct Energy is the North American subsidiary of Centrica plc 
(LSE: CNA). Centrica reported full year 2012 revenues of US$38.059 billion 
(C$38.050 billion, £23.9 billion) with an operating profit of US$4.36 billion 
(C$4.359 billion, £2.7 billion). 
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For the full year 2012, Direct Energy reported a 5% increase in profit from 
US$500 million (C$493.7 million, £312 million) reported for the full year 
2011, driven by operational efficiencies across business segments, including 
the move of the company's North American headquarters to Houston. 
Solid growth in residential and small business customers segments due in part 
to the successful integrations of recently completed acquisitions in the U.S. 
Northeast including Vectren Source and New York-based energy retailers 
Energetix and NYSEG Solutions, helped offset the planned, gradual exit of the 
Ontario business and an increasingly competitive commercial industrial 
segment. Direct Energy's year-over-year revenue decreased 3% from US$9.841 
billion (C$9.697 billion, £6.1 billion) in 2011 to $9.561 billion (C$9.558 
billion, £6.0 billion) in 2012. 
Chris Weston, President and CEO of Direct Energy, said: "We saw solid customer 
gains in the U.S. Northeast region and home energy services segment throughout 
2012. Although weakened economic conditions, the operating environment in 
Ontario and low wholesale prices posed challenges to parts of the business, we 
were able to achieve organic and acquisitive growth in many of our downstream 
and upstream segments, and successfully implement operational efficiencies 
across the business. We are well positioned to continue to build our company 
to create scale, stability and value for our customers across North America." 
Direct Energy also announced today that Chris Weston has been appointed 
Managing Director of Centrica's international downstream business with 
authority over British Gas and all of Direct Energy except its upstream gas 
assets. Mr. Weston will relocate from Houston to the United Kingdom for his 
new position. 
Accordingly, current Direct Energy Upstream and Trading President, Badar Khan, 
will succeed Mr. Weston as President and CEO of Direct Energy effective April 
1. Mr. Khan joined Direct Energy in 2003 and has served in several roles at 
Centrica and Direct Energy including Managing Director of British Gas 
Business. He is a veteran of the North American retail energy markets having 
been involved since 1999.  His earlier career was spent in management 
consulting with Deloitte Consulting and KPMG in the US and the UK. He holds an 
engineering degree from the UK, and an MBA from the Wharton School.  Mr. Khan 
will report to Mr. Weston. 
"Direct Energy has enjoyed significant success over the last three and a half 
years as we have grown our lines of business  and increased the company's 
revenue and operating profit," said Weston. "I look forward to working with 
Badar Khan as he takes on the role of running Direct Energy and increases our 
presence among customers and within the industry in the future." 
Full year 2012 highlights from Direct Energy's lines of business include: 
Direct Energy Residential 


    --  Operating profit for the business was broadly flat at US$249
        million (C$249 million).
    --  U.S. customer numbers increased to 3.5 million following
        organic growth and the successful integrations of Gateway
        Energy and Vectren Source in addition to the acquisition of an
        additional 245,000 residential and small business customers
        from New York-based energy retailers Energetix and NYSEG
        Solutions.
    --  Continued expansion of residential customer base in Texas from
        the successful integration of First Choice Power and sustained
        success of "Power to Go" pre-paid product offering.

Direct Energy Business
    --  Operating profit for the business increased 16% to US$205
        million (C$205 million) from US$176.5 million (C$173.9 million)
        in 2011.
    --  The business enjoyed record sales in 2012 reinforcing continued
        organic growth success.
    --  Operating margin increased to 4.8% reflecting the positive
        impact of operational efficiencies achieved in competitive
        market conditions.
    --  Sales channel optimization and headroom in key markets are
        driving the small business sector. The commercial and
        industrial segment is increasingly competitive, however we are
        holding market share through competitive price offerings.

Direct Energy Services
    --  Operating profit increased 14% to US$51 million (C$51 million)
        from US$44.8 million (C44.1 million) in 2011 following full
        integration of Home Warranty of America (HWA), which provides a
        platform for further opportunities for the cross-selling of
        energy and services.
    --  Contract relationships increased 5%, reflecting success of the
        HWA acquisition.
    --  Sustained market share growth despite challenging economic
        environment.

Direct Energy Upstream
    --  Operating profit for the business was US$21 million (C$20
        million)
    --  Successful integration of the producing natural gas weighted
        assets in the Carrot Creek region of Alberta acquired from
        Encana Corporation in December 2011.
    --  In Texas, power generation volumes increased by 21% largely due
        to good asset performance.

Notes: The results reported in British pounds are expressed in U.S. and 
Canadian dollars (based on monthly average FX rates) except where noted. For 
reference average full year rates are: For 2012: £1 = US$1.5896; 2011: £1 = 
US$1.6103: 2012: £1 = C$1.5892; 2011: £1 = C$1.5855.

About Direct Energy

Direct Energy is one of North America's largest energy and energy-related 
services providers with over six million residential and commercial customer 
relationships. Direct Energy provides customers with choice and support in 
managing their energy costs through a portfolio of innovative products and 
services. A subsidiary of Centrica plc (LSE: CNA), one of the world's leading 
integrated energy companies, Direct Energy operates in 46 U.S. states plus the 
District of Columbia and 10 provinces in Canada. To learn more about Direct 
Energy, please visit www.directenergy.com.

Micah Hirschfield, Direct Energy, micah.hirschfield@directenergy,com, +1 713 
877 3805; or Will Briganti, RLM Finsbury, will.briganti@rlmfinsbury.com, +1 
646 805 2034

http://www.directenergy.com

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SOURCE: Direct Energy

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CO: Direct Energy
ST: Texas
NI: OIL UTI 2575 WNEWS 

-0- Feb/27/2013 07:17 GMT


 
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