Shares in Centrica PLC (LSE:CNA) fell 3.4% to 173.65p after the British Gas owner reported lower first-half profits and said energy-market volatility meant progress in parts of the business was “slower than we would like”.
Underlying earnings (EBITDA) of £737 million were reported in the six months to June, down 18% compared to a year earlier. Statutory profit before tax swung to £672 million from a £43 million loss.
Infrastructure earnings fell 30% to £355 million, mainly reflecting Spirit Energy disposals, outages and lower realised prices from its nuclear operations.
British Gas EBITDA rose 2% to £346 million as better commercial performance and favourable pricing outweighed higher bad debts and spending on a transformation programme.
Free cash flow swung to an outflow of £570 million from an inflow the year before, reflecting £698 million of capital investment, including the acquisition of the Severn gas-fired power station and expansion of its Meter Asset Provider business.
Net cash shrank to £709 million from £1.5 billion at the end of last year, though Centrica raised its interim dividend by 9% to 2.0p per share.
For the full year, the company expects retail EBITDA towards the lower end of its £500-800 million range. Infrastructure EBITDA is forecast at £650-750 million, while optimisation should contribute around £250 million.
Chief executive Chris O’Shea said: "Volatility across energy markets has created challenges in some parts of our business, and some of our delivery has been slower than we would like.
"However, we have continued to invest with discipline to strengthen our portfolio and support long-term growth, making progress pivoting the group towards more stable and predictable earnings."
The board reiterated the targets of generating £2 billion in adjusted EBITDA and doubling 2025 earnings per share by 2030, and gave an early indication of 2027 energy earnings, with a range consistent with the levels in 2026
Infrastructure guidance for the current year was updated to £650-750 million, up from the previous £500-650 million range.
Broker Jefferies said first-half EBITDA was 4% below its forecasts, as retail was 5% above but Optimisation 23% below.
"The beat here appears primarily driven by below-the-line items, particularly lower D&A [depreciation and amortization]".
The "key new disclosure" was the early indication of Centrica Energy's 2027 earnings, implying a range of circa £200-250 million, which is below the consensus for this division of around £300 million, "implying potential downside risk to 2027 estimates".
** UPDATE: Adds share price and analyst comments **
