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

Article
December 18 2015

Related Articles

Gulf_Keystone_drilling.png
August 19 2015
The conversation is turning back to the business of the Ain Tsila field
Genel3.jpg
February 09 2016
Sound expects to start drilling its first well at the Tendrara licence, in north east Morocco, within the coming weeks.
Madagascar_oil_55927ba8d94b7.png
June 30 2015
Tsimiroro advanced significantly in recent months, partnering may be the next trigger

© Proactive Investors 2016

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.