Centrica: ‘Challenging market conditions’ hit FTSE 100 energy firm
Centrica has said it expects higher losses at its subsidiary, the UK’s largest gas storage site in the North Sea, known as Rough.
The owner of British Gas on Thursday reaffirmed full-year profit guidance and plans to hike dividends despite “challenging market conditions” in its gas and power segment.
Annual dividends are set it rise to 5.5p per share, up from 3p per share last year, Centrica said in a statement on the London Stock Exchange.
But the London-listed firm also warned “challenging market conditions” in gas and power meant profit at Centrica Energy, its energy and logistics arm, would likely fall at the lower end of guidance.
Centrica Energy Storage+, which operates the huge Rough gas field in the North Sea, is expected to report losses at the higher end of a range of £50m to £100m.
Shares fell more than seven per cent by mid-morning.
The FTSE 100 group has been pressing ministers for financial support to expand and redevelop the Rough site, arguing that this will stabilise prices.
Chief executive Chris O’Shea has lauded the merits of a “cap and floor” deal that would see revenue topped up by consumers should it drop below a certain benchmark. It believes such an arrangement would have saved consumers £5.2bn over the past two winters and could save £1bn a year or more by 2050.
“Constructive discussions are ongoing with the UK government to secure a regulatory support mechanism that unlocks £2bn of investment to increase Rough’s capacity and ultimately convert it into a hydrogen-ready storage facility,” Centrica said on Thursday.
The UK energy industry endured a bruising 24 hours on Wednesday amid news of fresh job cuts at Harbour Energy and Orsted’s decision to drop out of a key windfarm project.