Direct Energy Reports Six-Month Results

Direct Energy reported operating profit for the first six months of 2012 of US$263 million, versus US$279 million for the first half of 2011.

Direct Energy Residential operating profit was US$159 million for the first six months of 2012. Operating profit was down slightly versus the first half of 2011, with continued operational improvements and the impact of acquisitions broadly offsetting the impact of mild weather and market conditions in Ontario. Operating margin rose to 8.3%

Direct Energy's residential energy supply customer base stood at 3.240 million accounts as of June 30, 2012, down from 3.364 million as of December 31, 2011. The residential energy supply customer base had been 2.966 million as of June 30, 2011.

The decline was attributed to the challenging conditions in the Ontario market. Centrica reported further residential organic growth in US Northeast, with a 90,000 increase in accounts over period.

The residential customer totals do no include Direct Energy's pending acquisitions of Energetix and NYSEG Solutions, which will add a further 245,000 residential and small business accounts and will increase Direct's customer base in New York State to nearly 500,000.

Direct Energy Business reported operating profit of US$94 million for the first ix months of 2012. Operating margin for Direct Energy Business rose to 4.6%.

Direct Energy Business electric volumes were 23.9 TWh for the first six months of the year, up from 22.2 TWh a year ago. Business natural gas sales were 421 mmth for the first six months of the year, versus 417 mmth a year ago.

Parent Centrica said that Direct Energy Business's small commercial business is driving much of the growth, "as we continue to penetrate this attractive segment with tailored offers and high levels of customer service."

"Renewal rates have been very strong in the year to date as we capitalise on operational improvements. We have also begun equipping our field sales force with tablet computers to automate the sales process, and we have recently entered a number of markets, including Texas," Centrica said of the small business effort.

Centrica said that recently completed upstream gas, home energy services and retail gas and power acquisitions have helped improve sales growth, "and the company will be building on these acquisitions to deepen customer relationships by enhancing propositions to the customer through joining our services and energy products."