Direct Energy is not publicly traded in North America but Centrica, which trades on the London Stock Exchange (LSE: CNA), reports the financial performance of its North American subsidiary. Centrica reported half-year 2008 revenues of Pounds Sterling 10 billion(2) ($20 billion(1)) and earnings of Pounds Sterling 416 million(2)(3) ($826 million(1)).

For the first six months of 2008 as compared with the same period last year, Direct Energy's revenues were up 19 percent to $4.9 billion while operating profit was down 18 percent to $181 million.

"Direct Energy has sustained its success by building a diverse business that is engaged across the energy spectrum, from energy generation to wholesale and retail energy sales and energy conservation products and services," said Direct Energy Chairman and CEO Deryk King. "Our customers, whether commercial or residential, want a partner with the financial strength to weather these challenging times, the foresight to develop and market new, energy-efficiency products and services, and the courage to confront the status quo when change is needed in the energy sector."

Details on the first-half performance of each of Direct Energy's lines of business are below.

Mass Markets Energy

Direct Energy's Mass Markets Energy business, which comprises natural gas and electricity sales to residential and small commercial customers, experienced difficult trading conditions in the first half of 2008. Despite the market challenges, the business was able to grow its customer base. In Canada and the US Northeast, customer growth was achieved as a result of the business' fixed-price propositions becoming more attractive to consumers faced with rapidly raising energy prices. Revenue was up 3 percent to $2.7 billion and operating profit was down 29 percent to $122 million for the first half of 2008.

"With North America experiencing some of the highest energy prices since the aftermath of hurricanes Katrina and Rita in 2005, Direct Energy has seen renewed consumer interest in the price stability afforded by retail energy contracts," said Mr. King. "Trading conditions are difficult, as demonstrated in Texas where five retailers have recently exited the market."

Commercial and Industrial Energy

Direct Energy's Commercial and Industrial Energy business, which encompasses natural gas and electricity sales to medium- and large-sized businesses, public institutions and government, continued to deliver revenue and volume growth. Direct Energy also completed the acquisition of Strategic Energy in June for $300 million, doubling the size of its C&I business and making the Company one of the top-three commercial and industrial energy suppliers in North America. The business now serves 207,000 meters across Canada and the United States and has equivalent annual energy sales of approximately 55TWh. Revenue was up 48 percent to $1.4 billion due to higher prices and continued growth in the volumes of gas and electricity sold. Strategic Energy contributed $267 million of revenue from the date of its acquisition to the end of the half-year. Operating profit for the whole business was $16 million versus a loss of $2 million in the same period of 2007.

"The purchase of Strategic Energy strengthens our presence in all major competitive energy markets and creates a solid foundation for future growth," added Mr. King.

Home and Business Services

Direct Energy's Home and Business Services business achieved 13 percent customer growth in its protection plan offerings in Canada in the first half of 2008. However, its US residential new construction business was adversely affected by the continued housing slowdown with new home sales at their lowest level in 17 years. Revenue for the period was down 1 percent to $334 million. Operating profit was down 40 percent to $6 million recognizing that the phasing of profits in this business is traditionally weighted towards the second half.

"Home and Business Services is committed to leading the industry by offering customers the most innovative and effective strategies for managing their energy demands," noted Mr. King.

Upstream and Wholesale Energy

Upstream and Wholesale Energy comprises a range of activities: upstream gas, power generation, gas storage and transportation leases, wholesale power and gas transactions, wind power purchase agreements and proprietary trading. Results in the core natural gas production business were well ahead of the first half of 2007 with higher volumes from both the original business and the acquisitions of Rockyview and the Canadian assets of TransGlobe Energy. Gas production volumes were up by 22 percent to 18.3 Bcf. Total power generated in Texas fell by 8 percent to 2.3 TWh (2007: 2.5 TWh) due to an unplanned two week outage at the Bastrop Energy Centre in June. In addition, maintenance outages in transmission lines in West Texas caused major congestion, leading to a sharp decline in achieved power prices for all wind assets. Operating profit was down 5 percent to $37 million.

"Our established upstream and wholesale energy business provides Direct Energy with the capability to better manage today's volatile wholesale energy market," stated Mr. King. "We continue to evaluate opportunities to add natural gas reserves and production to our upstream business where value can clearly be found."

About Direct Energy

Direct Energy is one of North America's largest energy and energy-related services providers with over 5 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 22 states plus DC and 10 provinces in Canada. To learn more about Direct Energy, visit www.directenergy.com.

Notes:

The results reported in British pounds benefitted from a stronger Canadian dollar, offset partially by a weaker US dollar against the Sterling. Results are expressed in US dollars except where noted. Average exchange rates for 2008: Pounds Sterling 1 equals US$1.9845 equals C$1.9905; 2007: Pounds Sterling 1 equals US$1.9760 equals C$2.2376.

(1) Exchange rate used Pounds Sterling 1 equals US$1.9845

(2) from continuing operations

(3) including joint ventures and associates stated net of interest and taxation, and before exceptional items and certain re-measurements