Centrica interims hit by customer exodus, low commodity prices, warm weather in US

Adjusted interim operating profits at energy provider Centrica fell 12% to £853m as the departure of 399,000 customers in search of a better deal combined with extreme warm weather in North America and low commodity prices hit the bottom line hard.

Revenue fell 13% to £13.38bn and adjusted earnings 14% to £507m which in turn led to adjusted basic earnings per share slumping 17% to 9.8p. The interim dividend was increased to 3.6p from 3.57p.

Centrica said the customer exodus was in part due to people coming to the end of fixed-term contracts.

Looking forward, Centrica said commodity prices remain at low levels despite recent increases, and this would “inevitably have an impact on the earnings and cash flow from our E&P and Central Power Generation businesses in the second half of 2016, as historic hedges roll off”.

Centrica said it felt the impact of the Brexit vote in June were limited in the short term “to those common impacts felt by businesses in general, such as consumer confidence, interest rates and foreign exchange”.

“However, the result creates general uncertainty which adds to challenges for UK businesses in all sectors, with implementation plans as yet unclear,” the company said.

“Our focus is on understanding what the result means for energy and other business regulations over time and how the changed involvement of the UK would impact the competitiveness of the European energy markets. “

“The UK is now a major energy importer and what happens in the European energy market will ultimately impact energy consumers in the UK. We will continue to engage with the UK government and the European Commission as we move forward.”