31st Jul 2018 07:47
LONDON (Alliance News) - FTSE 100-listed Centrica PLC on Tuesday reported a "resilient" first half in the face of several problems, though its consumer businesses did suffer a fall in profitability.
Centrica also said Chief Financial Officer Jeff Bell will be leaving the firm, with former Smiths Group PLC and Vesuvius PLC CFO Chris O'Shea taking his place.
Bell will leave his post in at the end of October, and leave the company in July next year, while O'Shea will take up the position from the start of November.
In the six months to June, Centrica posted earnings before interest, tax, depreciation, and amortisation of GBP1.32 billion, up 7% year-on-year.
However, the company's adjusted operating profit was down year-on-year, by 4% to GBP782 million.
Despite this, it held its dividend at 3.6 pence per share for the interim period, and Centrica said it expects its 2018 dividend to remain at 12p, as long as cash flow and net debt targets are met.
Centrica said higher commodity prices and good production from the Rough field in the North Sea "largely" offset the fall in profit from its customer-facing divisions.
In the Centrica Consumer business, adjusted operating profit fell 20% year-on-year to GBP430 million, with the fall hardest in the UK Home segment.
Centrica said in the first quarter of 2018 energy consumption rose due to the harsh winter weather in the UK, but the company was hit by the full period impact of the UK prepayment cap brought in April 2017, lower customer numbers, and higher costs.
Centrica Business adjusted operating profit slid 57% year-on-year for the half to GBP96 million.
The firm said that, within Centrica Business, better UK Business performance was "more than offset" by other units, though North America Business returned to profit after a loss in the second half of 2017.
Exploration & Production adjusted operating profit soared to GBP256 million, rising GBP200 million, due to higher gas and liquids prices in the Spirit Energy business and a strong performance from the Rough field.
Looking to the rest of 2018, Centrica is overall confident on meeting 2018 financial targets.
Chief Executive Iain Conn said: "In a first half in which we experienced rapidly rising commodity prices, extreme weather patterns, continued competitive pressures and ongoing political and regulatory uncertainty, Centrica demonstrated resilience from its portfolio of businesses.
"We are on track to achieve our full year Group financial targets and expect to maintain the full year dividend per share at its current level, subject to delivering adjusted operating cash flow and net debt in line with our target ranges."
Conn continued: "We continue to make progress on implementing our strategy. We have developed new propositions and delivery capabilities in both customer divisions and our cost efficiency programme is on track.
"Although we are awaiting the final outcome of regulation to impose a temporary cap on all default tariffs for residential customers in the UK, we have plans in place to manage this. Our focus remains on performance delivery and financial discipline."
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