Centrica swings to loss, shares crash

Centrica plc (LON:CNA) shares crashed on Thursday after the electricity and gas supplier swung to a loss for the full year.

Shares in the owner of British Gas were down 16% during trading on Thursday.

The company posted an operating loss of £849 million, compared to a profit of £987 million for the year prior.

Meanwhile, adjusted operating profit slumped 35% to £901 million from 2018’s £1.4 billion figure.

Centrica blamed its disappointing results on the UK default tariff cap, which was put in place at the start of 2019 to stop consumers being overcharged for their energy consumption.

The owner of British Gas had already warned shareholders that the energy price cap would weaken its full year results.

Shares plummeted throughout last year as the company posted a chain of negative announcements.

“2019 operating profit and earnings were materially impacted by a challenging environment, most significantly the implementation of the UK default tariff cap and falling natural gas prices,” Iain Conn, Group Chief Executive who is set to depart, said in a company statement.

“Against this backdrop Centrica delivered growth in customer accounts, higher net promoter scores, significant cost efficiencies in excess of our target, and full year adjusted operating cash flow and net debt within its target ranges,” the Group Chief Executive continued.

“As expected, performance during the second half was much improved compared to the first half, demonstrating momentum as we enter 2020.”

Commenting on the future, the Group Chief Executive said: “Looking to 2020, we expect to deliver earnings momentum relative to 2019 from our core customer divisions, but Upstream earnings are likely to be impacted by the lower commodity price environment. However, with our continued focus on financial discipline we expect 2020 sources and uses of cash flow to remain broadly balanced.”

Shares in Centrica plc (LON:CNA) were down on Thursday, trading at -15.10% as of 11:57 GMT.