Thursday 18 January 2018

Centrica warns on 2014 earnings as it puts UK gas plants up for sale

Centrica has put its UK gas plants up for sale
Centrica has put its UK gas plants up for sale

Karolin Schaps

British utility Centrica warned on Thursday its full-year earnings would be lower than expected and said it was putting its loss-making gas-fired power plants on the block.

The group, which owns the UK's largest energy supplier British Gas, also said it expected to leave its residential prices unchanged this year, stopping short of replicating a pledge by competitor SSE to freeze prices.

Low demand for its energy due to mild winter weather and losses from its gas-fired power stations meant the company reduced its full-year earnings per share outlook by around 10 percent to 22-23 pence.

Shares in Centrica fell nearly five percent at market opening on Thursday, the biggest loser on Britain's blue-chip FTSE 100 index after it announced its results four days early.

"While earnings are anticipated to fall in 2014, we expect an improvement in 2015, assuming more normal weather conditions and reflecting the prospects for underlying growth," said Chief Executive Sam Laidlaw.

The company is searching for investors into three of its big gas-fired power plants at Langage, Killingholme and Humber which have been losing money due to the high spread between gas and power prices.

Centrica is looking at a number of options to attract investors to the plants, ranging from leasing agreements to outright sales, chief financial officer Nick Luff said.

The British utility's decision to seek investors for the majority of its thermal power plant portfolio mirrors problems utilities are facing across Europe, with Germany's RWE reporting a record loss in the first quarter due to unprofitable power plants.

Centrica also announced on Thursday it was selling a 40 percent stake in its Canadian natural gas business to joint venture partner Qatar Petroleum International for around $200 million.


Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business