Back to list Service & repair Feb 24, 2011 00:00 Direct Energy Profit Up 39% in 2010 Toronto, ON (2/24/2011) - Direct Energy, North America's largest competitive energy and energy-related services company*, today announced a 39 per cent increase in profit for the full year 2010 from C$272 million to C$377 million. The Company is the North American subsidiary of Centrica plc (LSE: CNA) and is the largest competitive retailer of energy and home services to consumers and the third largest commercial and industrial energy retailer in North America. It also has upstream gas and power assets. Direct Energy experienced a decline in revenues from C$10.9 billion in 2009 to C$9.5 billion for the period ended December 31, 2010 primarily due to lower commodity prices. In the same period, the Company delivered a gross margin improvement of 2 per cent from C$1.44 billion to C$1.46 billion and lowered operating costs by 7 per cent from C$1.17 billion to C$1.08 billion. "2010 was a strong and successful year for Direct Energy, as we enhanced our operations while also realizing growth through two sizeable acquisitions in Clockwork Home Services and Suncor Energy's Wildcat Hills natural gas assets in Alberta," said Chris Weston, President and CEO of Direct Energy. "2011 will see Direct Energy continue to grow, both organically and through acquisition, particularly in the US Northeast and in Services, following the integration of Clockwork. We will also invest in vertical integration through the acquisition of upstream natural gas and power assets." The Company has over 4,600 producing gas wells located in Western Canada, and the recent acquisition of the Wildcat Hills assets increased Direct Energy's reserves by 60 per cent. This transaction improves the level of the Company's asset cover, allowing Direct Energy to meet 35 per cent of its customers' gas demand through its own sources of production. In power, Direct Energy owns and operates 1,260 MW of generation through three natural gas-fired plants located in Texas, and also has long-term power purchase agreements with 813 MW of wind-powered electricity in that state. Direct Energy's downstream businesses have more than 6 million customer relationships across North America, providing residential and business customers with energy and energy-related services. Direct Energy, the 33rd largest company in Canada, with over 6,100 employees, is not publicly traded. Its parent company, Centrica, today reported full-year 2010 revenues of £22.4 billion (C$36 billion). Adjusted earnings were £1.3 billion (C$2 billion). Highlights from Direct Energy's lines of business: Direct Energy Residential Operating profit up 72 per cent from C$166 million in 2009 to C$286 million Continued to enter new markets in US Northeast states Launched a pre-paid electricity product in Texas Direct Energy Business More than doubled operating profit to C$140 million from C$61 million in 2009 (130 per cent) Record increase in sales volume, including key national accounts Direct Energy Services Revenue up 7 per cent over 2009 from C$725 million to C$777 million, while profit down 25 per cent in same period due to sale of appliance business and continued headwinds in the US housing market Acquired Clockwork Home Services for US$183 million, which materially increased Direct Energy's services business in North America Direct Energy Upstream North American gas and Texas power prices remained low, impacting the returns from Direct Energy's upstream and wholesale business Completed acquisition of Wildcat Hills natural gas assets for C$352 million, increasing Direct Energy's total natural gas production by 80 per cent to approximately 180 mmcfe/day Focus on Midstream & Trading with year over year gross margin improvements About Direct Energy Direct Energy is one of North America's largest energy and energy-related services providers with more than 6 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 states plus DC and 10 provinces in Canada. Notes: The results reported in British pounds are expressed in Canadian dollars (based on monthly average FX rates) except where noted. For reference average full year rates are: For 2010: £1 = C$1.6035; 2009: £1 = C$1.7835. * Based on customer numbers across deregulated energy markets * 2010 Financial Post 500; ranked by revenue. For additional information, contact: Hillary Marshall Direct Energy 1-416-590-3210 hillary.marshall@directenergy.com Phil Denning/Will Briganti Finsbury Group 1-212-303-7600 directenergy@finsbury.com