Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Centrica cuts divi as profits fall amid lower oil prices

Utility cut its full-year dividend per share by 11% to 12p
Centrica cuts divi as profits fall amid lower oil prices
Centrica is set to court controversy for a 31% rise in residential energy supply operating profit to £574mln

Centrica (LON:CNA) reported lower earnings and a dividend cut due to falling oil and gas prices but said British Gas boosted residential energy supply profits by 31%.

The company, which already announced 2,000 job cuts, also plans to cut 3,000 jobs in 2016.

Adjusted earnings in the year to December 31, 2015, fell 4% to £863mln on a 5% drop in revenue to £28bn.

Adjusted operating profit fell 12% to about £1.5bn and adjusted basic earnings per share dipped 4% to 17.2p. Centrica cut its full-year dividend per share by 11% to 12p.

The group said post-tax one-off items of about £1.8bn due mainly to falling commodity prices but operating cash flow was strong, allowing it to reduce net debt by 9% to £4.7bn.

Chief executive Iain Conn said: “Centrica has achieved a resilient financial performance, with solid 2015 adjusted earnings despite the challenge of falling wholesale oil and gas prices.

"We remain confident that our plans and underlying performance momentum will allow us to more than balance cash flows and deliver at least 3-5% per annum underlying operating cash flow growth to 2020, even in the current environment, so underpinning a progressive dividend policy.”

Centrica is likely to attract controversy for boosting residential energy supply operating profits by 31% to £574mln, given criticism of the industry that reductions in household bills have not kept pace with falls in wholesale oil & gas prices.

But the company said residential services operating profit dropped 5% to £257mln while business energy supply and services fell into the red, leaving total British Gas operating profit down 2% at £809mln.

Centrica said it planned to save £200mln in 2016 as part of a drive to cut costs by £750mln a year by 2020.

It added that it was working on assumed flat real prices of $35/bbl Brent oil, 35p/th UK NBP gas and £35/MWh UK power.

Phil-Waller.jpg


Register here to be notified of future CNA Company articles
View full CNA profile

Centrica Timeline

Related Articles

oil workers
January 23 2017
The Irish oil company has told investors that it is on track to kick off the Druid exploration well in June.
oilOnshore.jpg
January 23 2017
Chief executive Matthew Idiens said "with the change in political regime in the US, we feel the incoming administration will be very supportive of our industry."
carnarvon-petroleum-MD-Adrian-Cook-757.jpg
February 03 2017
Adrian Cook discussed the company's 2017 exploration plan with investors.

© Proactive Investors 2017

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.