HOUSTON, July 31, 2013 /PRNewswire/ -- 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 (US$1.185 billion).
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 standards.
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 improvement.
- Continued market share growth, with 40,000 new customer accounts.
- 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 27th, 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