Centrica released a trading announcement on Thursday, revealing that it has maintained its full-year guidance.
The group held its focus on performance delivery and financial discipline. This is despite unforeseen outages and operation issues in E&P and Nuclear activates. Despite this, shares in the company (LON:CAN) plummeted over 7% today.
The company has stated that it expects to achieve an adjusted operating cash flow for the year in the £2.1-£2.3 billion bracket. Additionally, it expects net debt to remain within the £2.5-£3 billion range and an in-year efficiency delivery of over £200 million.
Moreover, the company has predicted it will maintain the full year dividend at 12p per share. This figure is said to be consistent with the delivery of a £2.1-£2.3 billion per annum of adjusted operating cash flow. Likewise, the dividend per share predictions remains conditioned on the net debt targets outlined above.
Centrica Group Chief Executive, Iain Conn, has commented on the results:
“As we have done over the last four years, we are focused on driving significant underlying improvements in performance and delivering attractive returns while re-positioning the portfolio towards the customer.”
“Our efficiency delivery and new customer propositions are helping to offset the effects of strong competition and regulation in energy supply. Our financial performance has remained resilient despite weaker than planned volumes from our E&P and Nuclear activities and cash generation remains strong.”
“Maintaining a focus on performance delivery and financial discipline and demonstrating resilient cash flows remain our objectives for 2019 and beyond, as we deal with the impact of the UK energy supply default tariff cap.”
Ofgem’s energy supply cap tariff will considerably impact Centrica and other big-six energy suppliers.
The trading announcement also addressed the UK energy supply price cap, introduced by Ofgem at the beginning of November. The company has said that it currently has 3.1 million customers on the Standard Variable Tariff. This is a decrease from the 4.3 million figure at the start of the year. Additionally, Centrica expects to reduce this figure even further to below 3 million customers by the end of the year.
The price cap is expected to cost Centrica £70 million in the first quarter of 2019 alone.
In E&P, Spirit Energy production for 2019 is expected to remain similar to levels in 2018. However, performance in the Centrica’s nuclear division has been affected by extended inspections and outages of its power stations.
At 14:53 GMT today, shares in Centrica plc (LON:CAN) were trading at -7.29%.
