Puzzled by Profits

[Deleted User]

jj_43 said:

Xbigman said:

British Gas homecare made most of BG's profits. BG's retail energy division appears to have made a loss. 

And Shells average over charge of customers that needed correcting is about £10.


Darren 

Not correct. BG homecare profits fell 88% from £60m to £7, retail energy profits fell to £98m from £172m.
source: Interim results for the period ended 30 June 2022

£55 million in domestic retail profit - split that between the 7.26 million retail customers and you get how much per customer?  About £7.50 each.  Rolling in cash.

mark_cycling00

I doubt anyone on here is actually an energy supplier trying to do some PR. 

There are people who want to explain all the different layers in energy exploration, generation through to supply.
It's pointless getting angry at the wrong entities.

For domestic heating oil, most of this is supplied by a company called DCC.
Below you can see their share price and profits (roughly 5% before tax)

https://www.hl.co.uk/shares/shares-search-results/d/dcc-plc-ordinary-eur0.25

The share-price is dropping despite the very high price of oil. That's because they like other energy suppliers and just add a small mark-up to the price that they obtain it from (Esso? who knows) People will try to cut back on heating this winter and so energy supply is not a good business to be in.

If you're angry about paying a high price for heating oil it would be very wrong to have a rant at the tanker delivery guy.

Compare DCC to Equinor who are the Norwegian company who get most of the gas out of the north sea. 
Their share price is rocketing and their profits are in excess of 45% of turnover.

This discussion matter is mostly psychological rather than logical.
For instance; there is a "plastic free" shop in Bristol that makes 50% profit on everything it sells. Customers who go there hate Amazon for profiteering despite the fact that the Amazon retailing doesn't make a penny in profit.

jj_43

Deleted_User said:

jj_43 said:

Xbigman said:

British Gas homecare made most of BG's profits. BG's retail energy division appears to have made a loss. 

And Shells average over charge of customers that needed correcting is about £10.


Darren 

Not correct. BG homecare profits fell 88% from £60m to £7, retail energy profits fell to £98m from £172m.
source: Interim results for the period ended 30 June 2022

£55 million in domestic retail profit - split that between the 7.26 million retail customers and you get how much per customer?  About £7.50 each.  Rolling in cash.

Economics and competition don't work on the basis of "its only a few £ profit for month" so its OK. 

Sea_Shell

jj_43 said:

supplier, distributors, generators, midstream, upstream - all designed to extract optionality and profits at the expense of customers, who finance all this.

And if they (producers) couldn't make money in the UK, then they would probably up sticks and move their operations (or concentrate their production) elsewhere.

Who exactly would the government then get to produce gas/oil?

jj_43

Sea_Shell said:

jj_43 said:

supplier, distributors, generators, midstream, upstream - all designed to extract optionality and profits at the expense of customers, who finance all this.

And if they (producers) couldn't make money in the UK, then they would probably up sticks and move their operations (or concentrate their production) elsewhere.

Who exactly would the government then get to produce gas/oil?

Thats the argument for nationalisation. That alone won't reduce prices, you'll need a long plan for more self supply and decoupling from the international energy markets.

A energy bailout is on the way, shareholders will be wiped out.

[Deleted User]

So we're going to nationalise what exactly?  The Saudi oil fields?  The Canadian shale sands? The Norwegian gas fields? The Australian coal mines?  The German and Danish wind turbine factories?

Section62

jj_43 said:

Thats the argument for nationalisation. That alone won't reduce prices, you'll need a long plan for more self supply and decoupling from the international energy markets.

A energy bailout is on the way, shareholders will be wiped out.

Why would an "energy bailout" be necessary if the companies involved are "all designed to extract optionality and profits at the expense of customers, who finance all this", and are making "huge profits"?

jj_43

And your solutions are?

We are only 40% self sufficient in our energy. We need to increase output in the North Sea, or Shale if your a fan. We need to reduce demand. Once we become self sufficient, decouple from international markets, turn off the interconnections, direct any profits into a wealth fund.

 

jj_43

Section62 said:

jj_43 said:

Thats the argument for nationalisation. That alone won't reduce prices, you'll need a long plan for more self supply and decoupling from the international energy markets.

A energy bailout is on the way, shareholders will be wiped out.

Why would an "energy bailout" be necessary if the companies involved are "all designed to extract optionality and profits at the expense of customers, who finance all this", and are making "huge profits"?

A bailout on the scale of the 2008 financial crash. People simply won't be able to pay their bills, bad debt levels will start affecting the insolvency of the energy suppliers. The working capital requirements of having to purchase energy at sky high levels.

Section62

jj_43 said:

And your solutions are?

 

I'm not the one predicting the need for an "energy bailout" and shareholders being "wiped out", whilst simultaneously claiming the companies are making "huge profits".

If I'd postulated an unlikely scenario which doesn't fit the other claims I was making, then I might offer a solution to my imaginary disaster.

But I prefer to deal with reality and practical steps to help people at this difficult time.