Centrica blames gas glut and energy price cap for £1.1bn loss

  • Feb 13, 2020
  • The Telegraph

Centrica blamed a "challenging environment", singling out the energy price cap and falling natural gas prices, for a £1.1bn annual loss that sunk its share price.

Gas prices remain at record lows as the likes of Norway, Qatar, and Russia export large volumes, creating a glut.

That contributed to Centrica taking a £1.75bn hit in one-off charges, with a £476m writedown on the value of its oil and gas production assets and a £372m charge on its stake in UK nuclear power plants.

“The gas market is very oversupplied right now because of associated gas from shale oil in the US and lower levels of demand in Asia and to trump it all the coronavirus,” said chief executive Iain Conn.

The company has been rocked in recent years by a customer exodus and razor-thin margins in the face of intense pressure from smaller suppliers offering cheaper deals.

Centrica lost 286,000 accounts last year, but added 28,000 customers in the last three months of the year as it hit back against smaller rivals by introducing more low cost tariffs.

However, Centrica said pre-tax losses hit £1.1bn, compared with a £575m profit the year before, after almost all of its gains in the consumer division were offset by losses in the company's upstream business.

Shares fell almost 18pc to 69p, wiping hundreds of millions off its market value.

It was Mr Conn's last set of results as chief executive, after he announced last July that he would step down this year. A search for his replacement was continuing, although the company failed to mention it on Thursday.