Energy firm Centrica warns on earnings

14th November 2013, Comments 0 comments

Britain's biggest domestic energy provider Centrica, owner of British Gas, warned Thursday that earnings per share would be flat this year due to "challenging" market conditions.

Centrica added in a trading update that it had been forced to hike its domestic electricity and gas prices last month in order to offset losses at its residential business.

"The group has continued to make good strategic progress, accessing new markets and securing new sources of gas," it said in a statement.

"However market conditions remain challenging, particularly in business energy supply in both the UK and the US, in UK gas-fired power generation and in UK gas storage.

"Overall, the group expects to deliver 2013 adjusted earnings per share at similar levels to 2012, subject to the variables of weather, commodity prices and asset performance."

The news sent Centrica's share price sliding 2.94 percent to 353.2 pence on London's FTSE 100 index of top companies, which was 0.78 percent higher at 6,681.54 points.

The group had announced in October that its British Gas division would ramp up prices for electricity and gas by 10.4 percent and 8.4 percent respectively, with effect from November 23.

Five of Britain's 'Big Six' energy providers have now lifted their prices ahead of Britain's winter, which is the peak demand season for energy.

The round of price hikes has stoked a major political row over the high cost of living for millions of Britons.

"These are unprecedented times for the energy sector in the UK, with intense public and political debate over rising bills," Centrica added on Thursday.

"This is happening at a time when the costs of securing and supplying energy are increasing, due to higher wholesale commodity prices, rising charges for transporting energy to the home and the increasing cost of meeting environmental and social obligations."

© 2013 AFP

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