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.

View full CNA profile View Profile

Centrica Timeline

Related Articles

picture of gas flare
July 19 2017
A new gas generator also came on stream recently and has started to produce the first power from the project
picture of oil wells
September 06 2017
The core of the portfolio is in the East Midlands Basin, which includes the Wressle-1 oil discovery
picture of oil facilities
August 14 2017
Echo has ‘two fantastic opportunities’ in Huayco and Rio Salado in Bolivia

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© 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.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use