Most US car buyers aren’t…
Saudi Arabia recently came under…
British Gas owner Centrica Centrica Plc (OTCPK:CPYYY) saw its FY 2022 profits triple to a record 3.3 billion pounds last year amid high energy prices. Centrica's bottom-line received a big boost by soaring profits in its upstream oil and gas division, with wholesale gas prices in the country hitting record highs last year.
Centrica, which owns a 20% stake in Britain's nuclear power stations, also benefited from increased generation last year. Centrica announced an extension of the company's share buy-back programme to $300 million pounds from 250 million pounds, meaning the company intends to buy back 10% of its capital.
Citi analyst Jenny Ping has maintained a Buy rating for Centrica shares, highlighting the company's strong cash generation, strong balance sheet, and the giant share buyback program. Last August, Centrica signed a 15-year supply deal with Delfin Midstream valued at £7B ($8.45B) for liquefied natural gas from a planned LNG export facility off the coast of Louisiana.
But Centrica is not the only British energy company posting record profits. British giant BP Plc (NYSE: BP) announced annual profits of nearly $28 billion for FY 2022, more than double the year before and the biggest in the company's 114-year history. BP was able to post the record profits despite taking a massive post-tax charge of $24.4 billion in its 1Q 2022 results, the largest such impact on any company globally, after exiting its 19.75% stake in Russia’s Rosneft PJSC.
The record profits by British energy firms have, however, been attracting the ire of politicians.
Back in November, the UK government announced plans to increase a windfall tax on oil and gas producers’ profits to 35% from the previous rate of 25%. The new rate, which applies from 1 January 2023 until March 2028, is part of a raft of budgetary measures aimed at tackling the cost of living crisis and shoring up the UK’s finances. Normally, UK oil and gas companies operating on its continental shelf are subject to a 40% tax rate, much higher than the 19% rate on corporate profits for companies in other sectors. The new levy now means that companies like BP and Shell Plc. (NYSE: SHEL) will now fork over 75% in taxes, up from 65% in 2022.
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com:
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.