Welcome!

News Feed Item

Direct Energy Revenue Up 28% in 2013

Product innovations, acquisitions drive customer growth

HOUSTON, Feb. 20, 2014 /PRNewswire/ -- Direct Energy, North America's largest competitive energy and energy-related services company, today announced gross revenue for the full year 2013 of US $11.4 billion (£7.3 billion), an increase of 28 percent, and an operating profit of US$436 million (£276 million). Direct Energy is the North American subsidiary of Centrica plc (LSE: CNA). Centrica reported full year 2013 revenues of US$41.6 billion (£26.6 billion) with an operating profit of US$4.2 billion (£2.7 billion).

(Logo: http://photos.prnewswire.com/prnh/20121004/MM87276LOGO)

For the full year 2013, Direct Energy reported that profits fell 11% from US$492 million (£310 million) for the full year 2012, primarily due to lower margins in our commercial and industrial energy supply business and increased competition across most of our markets. The operating profit in 2013 includes US$21 million of integration costs and US$32 million of additional customer amortization related to the Hess Energy Marketing acquisition announced in July. 

Badar Khan, President and CEO of Direct Energy, said: "Direct Energy is poised for significant growth as we further integrate Hess Energy Marketing, continue accelerating residential customer growth via our digital platform from the Bounce Energy acquisition, and introduce innovative products and services across our energy and home services offerings. Despite competitive pressures and rising gas and power prices impacting our margins, we operated more efficiently, and grew our customer base to deliver significant, albeit slightly reduced, profit. We also saw impressive customer growth in most of our businesses."

Direct Energy reorganized in late 2013 creating a Chief Operations Officer position focused on reducing costs through operational synergies. The company is also bringing creative products and services to market to drive customer growth. Additionally, Direct Energy recently completed the disposal of three Texas-based power stations, sold to Blackstone in December for US$687 million (£420 million).

In 2014, cost competitiveness and customer innovation will be key priorities. The home services business will continue to see organic growth in its protection plan offering and will also begin a transition to a single operating system. A new residential energy billing platform will launch in Alberta, and new consolidated call centers in Phoenix and Tulsa already are generating efficiencies. Building on innovations, such as the 'Power to Go' prepaid and 'Free Power Saturdays' products, Direct Energy recently launched new mobile web-enabled smart thermostats in Texas and Canada, and expects to continue to expand our product and services offerings across energy and services.

"We are taking bold steps to leverage efficiencies across our lines of business and through further integration of acquisitions, so that we can deliver customer-engaging innovations that add value, convenience and more options for our customers," said Khan.

Full year 2013 highlights from Direct Energy's lines of business include: 

Direct Energy Residential

  • Gross revenue increased to US$3.948 billion (£2.517 billion).
  • Operating profit for the business increased to US$258 million (£$163 million).
  • The total number of residential energy customers declined slightly in 2013 to 3.4 million, as Direct Energy ceased renewing or signing new customers in Ontario due to energy policy changes, and as a result of increased competition in Texas and the U.S. North East
  • The successful integration of Energetix and NYSEG Solutions acquisitions resulted in an increase in profitability in the U.S. North East. In Texas, sales of the prepayment product, Power to Go, increased 30 percent.
  • The acquisition of Bounce Energy, added 80,000 accounts to Direct Energy's Texas business, and, importantly, provided a leading digital and e-commerce platform for marketing new product innovations over time.

Direct Energy Business

  • Gross revenue increased by 52 percent to US$6.6 billion (£4.2 billion) due to higher wholesale commodity prices on retail prices and increased sales.
  • Operating profit for the business declined 36 percent to US$122 million (£77 million) from US$192 million (£121 million) in 2012. The operating profit in 2013 includes US$21 million of integration costs and US$32 million of additional customer amortization related to the Hess Energy Marketing acquisition announced in July. 
  • Operating margin fell to 1.8 percent (2012: 2.8 percent).
  • The acquisition of Hess Energy Marketing was completed November 1, helping drive a more than doubling of gas volumes to 1,839mmth (2012: 793mmth). Electricity volumes increased 24 percent to 63.9TWh (2012: 51.4TWh).

Direct Energy Services

  • Gross revenue increased seven percent to US$890 million (£$570 million), primarily due to increased sales from owned stores and franchise operations.
  • Operating profit increased to US$57 million (£$36 million) from US$51 million (£33 million) in 2012.
  • Market share grew in 2013; 293,000 accounts were added in part resulting from the acquisition of AWHR, with 80,000 residential customers in the U.S. Midwest, Northeast, and Florida.
  • AWHR provides expanded products and services offerings, including water heater rentals, along with heating, air conditioning, plumbing, and electrical services.
  • The Home Warranty of America acquisition in 2012 also produced additional accounts, with 100,000 current whole-home warranty plans in effect, up from 70,000 at the time of acquisition.

Notes: The results reported in British pounds are expressed in U.S. dollars (based on monthly average FX rates) except where noted. For reference average full year rates are: For 2013: £1 = US$1.5650; 2012: £1 = US$1.5896;

About Direct Energy
Direct Energy is one of North America's largest energy and energy-related services providers with 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

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, discussed using predictive analytics to mon...
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor – all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discussed how businesses can gain an edge over competitors by empowering consumers to take control through IoT. He cited examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He also highlighted how IoT can revitalize and restore outdated business models, making them profitable ...
SYS-CON Events announced today that Isomorphic Software will exhibit at DevOps Summit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Isomorphic Software provides the SmartClient HTML5/AJAX platform, the most advanced technology for building rich, cutting-edge enterprise web applications for desktop and mobile. SmartClient combines the productivity and performance of traditional desktop software with the simp...
"When you think about the data center today, there's constant evolution, The evolution of the data center and the needs of the consumer of technology change, and they change constantly," stated Matt Kalmenson, VP of Sales, Service and Cloud Providers at Veeam Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
We all know the latest numbers: Gartner, Inc. forecasts that 6.4 billion connected things will be in use worldwide in 2016, up 30 percent from last year, and will reach 20.8 billion by 2020. We're rapidly approaching a data production of 40 zettabytes a day – more than we can every physically store, and exabytes and yottabytes are just around the corner. For many that’s a good sign, as data has been proven to equal money – IF it’s ingested, integrated, and analyzed fast enough. Without real-ti...
Actian Corporation has announced the latest version of the Actian Vector in Hadoop (VectorH) database, generally available at the end of July. VectorH is based on the same query engine that powers Actian Vector, which recently doubled the TPC-H benchmark record for non-clustered systems at the 3000GB scale factor (see tpc.org/3323). The ability to easily ingest information from different data sources and rapidly develop queries to make better business decisions is becoming increasingly importan...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it ...
Cloud analytics is dramatically altering business intelligence. Some businesses will capitalize on these promising new technologies and gain key insights that’ll help them gain competitive advantage. And others won’t. Whether you’re a business leader, an IT manager, or an analyst, we want to help you and the people you need to influence with a free copy of “Cloud Analytics for Dummies,” the essential guide to this explosive new space for business intelligence.
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Qosmos has announced new milestones in the detection of encrypted traffic and in protocol signature coverage. Qosmos latest software can accurately classify traffic encrypted with SSL/TLS (e.g., Google, Facebook, WhatsApp), P2P traffic (e.g., BitTorrent, MuTorrent, Vuze), and Skype, while preserving the privacy of communication content. These new classification techniques mean that traffic optimization, policy enforcement, and user experience are largely unaffected by encryption. In respect wit...
ReadyTalk has expanded the capabilities of the FoxDen collaboration platform announced late last year to include FoxDen Connect, an in-room video collaboration experience that launches with a single touch. With FoxDen Connect, users can now not only engage in HD video conferencing between iOS and Android mobile devices or Chrome browsers, but also set up in-person meeting rooms for video interactions. A host’s mobile device automatically recognizes the presence of a meeting room via beacon tech...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...