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However, profits from British Gas, part of the Centrica Group, rose to £299 million from £166 million in the same period last year. The firm believes this was because the weather was a lot colder in the winter months this year.
Chief Executive of Centrica, Sam Laidlaw, said: "We have created a strong foundation here over the last two years and now is the time to take British Gas to the next stage of its evolution. Building on our already strong brand in the UK we are seeking to deepen the customer relationship by combining the energy and services propositions.
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"To best achieve this we will combine British Gas Residential, British Gas Business and British Gas Services into a single customer-focused organisation.
"This will enable us to launch new bundled products under the British Gas brand, products that customers want, to increase customer loyalty, to further reduce costs and to target even more efficiently the substantial support we already provide for our vulnerable customers."
British Gas made a 10% reduction in the standard gas tariff from February and a similar cut in electricity prices in May.
The firm said this had allowed it to drop the price of energy for its residential customers, which had in turn enabled it to improve its competitive appeal.
Summarising the results, Mr Laidlaw concluded: "Following a record 2007, the financial performance in 2008 was good despite a much harsher environment. We made strong progress against the strategic priorities we set out at the end of 2006. The outlook for the global economy remains very challenging and in the UK 2009 could be particularly difficult for many of our customers, both residential and commercial. We will continue to place our customers' needs at the forefront of our agenda, alongside our determination to deliver increasing long-term value for our shareholders."
(CD/JM)
