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
The cloud competition for database hosts is fierce. How do you evaluate a cloud provider for your database platform? In his session at 18th Cloud Expo, Chris Presley, a Solutions Architect at Pythian, gave users a checklist of considerations when choosing a provider. Chris Presley is a Solutions Architect at Pythian. He loves order – making him a premier Microsoft SQL Server expert. Not only has he programmed and administered SQL Server, but he has also shared his expertise and passion with b...
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service. In his session at 19th Cloud Exp...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, provided an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data professionals...
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and G...
"We are a modern development application platform and we have a suite of products that allow you to application release automation, we do version control, and we do application life cycle management," explained Flint Brenton, CEO of CollabNet, in this SYS-CON.tv interview at DevOps at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
In IT, we sometimes coin terms for things before we know exactly what they are and how they’ll be used. The resulting terms may capture a common set of aspirations and goals – as “cloud” did broadly for on-demand, self-service, and flexible computing. But such a term can also lump together diverse and even competing practices, technologies, and priorities to the point where important distinctions are glossed over and lost.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...