Centrica Cuts Full-Year Profit Outlook on Mild U.K. WeatherNidaa Bakhsh
Centrica Plc, the biggest energy supplier to U.K. households, cut its full-year earnings outlook because of mild weather and outages at nuclear power plants.
Adjusted earnings per share are now expected to be in the range of 19 pence to 20 pence, down from a previous range of 21 pence to 22 pence, the Windsor, England-based company said today in a statement. The utility forecasts profit growth in 2015.
Earnings will be cut by boiler spine inspections at Electricite de France SA’s Heysham-1 and Hartlepool nuclear stations, where Centrica has a 20 percent stake. Residential gas consumption for the first 10 months of the year was 21 percent lower than the same period last year.
The shares fell 1.6 percent to 293.90 pence at the close in London trading. That’s the lowest price since Oct. 27.
Centrica is also grappling with a competition probe and the resignations of three senior managers this year. It had already cut its expected range for full-year adjusted earnings per share in July, when it announced half-year profit fell by a third.
The company expects to produce about 80 million barrels of oil and gas this year, lower than its previous forecast, mainly because of gas-export pipeline constraints in the Netherlands. It anticipates a “significant reduction” to gas earnings next year amid lower prices.
“We are less concerned about the revision to the current year’s outlook, but the implication for 2015 from a weakening exploration and production business will be negative,” Deepa Venkateswaran, a senior research analyst at Sanford C. Bernstein & Co., said by e-mail.
Centrica will cut capital expenditure to 1.2 billion pounds ($1.9 billion) next year from 1.35 billion pounds in 2014 as projects come onstream. It sees first gas production from its Valemon project in the North Sea early next year with Cygnus coming onstream by the end of 2015.
Its plan to sell gas-fired power plants in the U.K. is “going very well,” with lots of interest from different types of buyers, Jeff Bell, interim chief financial officer, said on a conference call, without elaborating. Nick Luff leaves the post for Reed Elsevier Plc.
Iain Conn from BP joins Centrica as chief executive officer from January, replacing Sam Laidlaw, who was head for eight years. Chris Weston, head of British Gas, will be replaced by Ian Peters from Dec. 1.