Bord Gáis owner Centrica shares slide on UK woes

Bord Gáis owner Centrica shares slide on UK woes

Shares in Centrica slumped as an update from the British Gas and Bord Gáis owner showed it had lost customers in its key British market.

The shares ended 8.5% lower to value the firm at £8.3bn (€9.3bn). They were also weighed down by cuts in output from its part-owned nuclear power plants in Hunterston and Dungeness in Scotland and England, and a drop in output from its own exploration and production division of oil and gas.

Its British Gas unit is the UK’s largest supplier to consumers and generates the bulk of its revenues and profits in the UK.

Bord Gáis in Ireland is best known as the supplier of fuel to homes and businesses, repairing residential boilers, and as the owner of the power generator in Whitegate in Co Cork, which it opened nine years ago.

A short outage for maintenance at Whitegate in the nearly part of the year had led to the halving of the operating profit it generates in Ireland at the half-year stage, the company said in July.

It said at the time that following August tariff increases in gas and electricity, “we would expect to see improved adjusted operating profit from Ireland” in the second half of the year.

In yesterday’s trading update, Centrica’s figures showed it had lost 372,000 customers in the four months to the end of October, as smaller rivals in the UK ate into its market share.

British energy suppliers are also facing a price cap on the most commonly used tariffs from the start of 2019, a move the UK regulator Ofgem has said would save households around £1bn (€1.1bn) a year.

Centrica said the cap would lead to a one-off negative adjusted profit impact of about £70m in the first quarter of 2019.

Forecast 2018 production at Centrica’s exploration and production division’s Spirit Energy fell due to unplanned outages and operational issues. Centrica has a 20% stake in EDF’s British nuclear plants, which have been hit by outages at the Hunterston and Dungeness.

The Hunterston unit has been offline since March when cracks were found in its core during a routine inspection.

Additional reporting Reuters

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