Operating Profit Up Four Percent for the First Six Months of 2013
HOUSTON, July 31, 2013 /CNW/ - Direct Energy, North America's largest
competitive energy and energy-related services company, today announced
operating profit of $255 million for the first six months of 2013. The company
saw year-on-year total revenue increase to $4.931 billion from $4.371 billion
for the same period in 2012, reflecting volume growth and higher wholesale
prices. Direct Energy is the North American subsidiary of Centrica plc (LSE:
CNA), a leading integrated energy company. Centrica reported first half 2013
revenues of £13.7 billion (US$21.085 billion) and earnings of £767 million
Badar Khan, President and CEO of Direct Energy, said: "Direct Energy delivered
strong operational performance in the first half of the year, against a
backdrop of rising gas and power prices, which resulted in some narrowing of
margins. We have seen an increase in business supply volumes compared to 2012
and material improvements in the new housing market in the U.S., which have
contributed to higher revenues in our residential construction division of
Direct Energy Services."
"With our announced acquisitions of Hess Energy Marketing yesterday, Bounce
Energy on July 12, and the benefit of previous acquisitions combined with our
continued focus on improved customer service, we are well positioned to
deliver on our full year targets," Khan added.
The efforts of Direct Energy's employees in the first half of the year are
being felt throughout the company as it continues to deliver high levels of
customer service while also ensuring and maintaining the highest safety
The company is also moving forward on innovation initiatives such as smart and
time-of-use products putting customers in control and making their lives
easier. Direct Energy also unveiled its newly redesigned website, which
significantly enhances the customer's online experience.
First half 2013 highlights from Direct Energy's lines of business include:
Direct Energy Residential
-- Gross revenue and operating profit broadly flat at $2.024
billion and $154 million, respectively, reflecting improved
volumes and margins in U.S. North and Alberta, offset by some
narrowing margins in the Texas market.
-- The benefits from the full year effect of the NYSEG Solutions
and Energetix acquisitions in U.S. North are being delivered.
-- The acquisition of Bounce Energy, a Texas-based electricity
retailer, announced earlier in July, will add around 80,000
accounts to our customer base in Texas and also provide a
leading internet-based digital platform for marketing
innovative products and servicing customer accounts.
Direct Energy Business
-- Gross revenue increased 21 percent to $2.484 billion,
reflecting volume growth and the impact of higher wholesale
commodity prices on retail prices. Operating profit increased
to $82 million from $68 million.
-- Strong sales supported a 17 percent increase in total
electricity and gas volumes respectively.
-- The acquisition of Hess Energy Marketing, a U.S. energy
retailer serving more than 23,600 commercial and industrial
customers in 18 states across the Eastern U.S., will
significantly advance Direct Energy Business' growth in
electricity and natural gas in North America.
Direct Energy Services
-- Gross revenue slightly ahead at $422 million, while operating
profit increased to $19 million, owing to revenue growth and
cost control. Given the seasonality in the business, we expect
increased profitability in the second half and full year
-- Continued market share growth, with 40,000 new customer
-- Optimism in the U.S. economy has generated a revival in new
housing starts and an increase in demand for HVAC products. An
increase in franchise territories, with a particular focus in
the Direct Energy residential footprint, should further enhance
cross-sell activities over time.
-- The results reported in British pounds are expressed in U.S.
dollars (based on monthly average FX rates) except where noted.
For reference average half year rates are: For 2013: £1 =
$1.5446; 2012: £1 = $1.5823.
-- On February 27(th), 2013, Centrica announced a new
organizational structure with the North American Upstream Gas
business now reflected in its International Upstream
organization and the North American Power and Midstream &
Trading businesses reflected in its International Downstream
organization within Direct Energy. For management reporting
purposes, North American Power and Midstream & Trading
businesses are now reported within Direct Energy Business. 2012
revenue and operating profit have been restated accordingly.
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.
SOURCE Direct Energy
Micah Hirschfield, Direct Energy, +1-713-877-3805,
firstname.lastname@example.org, or Will Briganti, RLM Finsbury,
PRN Photo Desk, email@example.com
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