The owner of British Gas has reported a huge fall in profits after being hit by warmer weather and the plunge in oil and gas prices.
Centrica’s profits slumped by 35% to £1.75 billion last year while operating profits at British Gas fell 20% to £823 million as customers used less gas for heating.
British Gas also lost 368,000 customers last year, ending 2014 at 14.8 million.
The energy giant claims the average customer bill was down by around £100 and average profit per customer fell by almost £10.
The fall in global oil and gas prices also forced Centrica to write off £1.4 billion from its balance sheet.
Iain Conn, who took over as Centrica’s Chief Executive at the start of the year, said he expects the company’s North Sea exploration and production spending to fall by around £800 million this year and a further 40% – to £650 million – in 2016.
The company plans to close two gas-fired power stations – Killingholme and Brigg – following a review which found they were losing money.
Mr Conn added: “2014 was a very difficult year for Centrica and the recent fall in oil and gas prices creates further challenge. We are cutting investment and costs in response.
“However, it is with regret that, along with reducing capital expenditure and driving efficiency beyond planned levels, we have taken the difficult decision to rebase the dividend by 30%, commencing with the final distribution for 2014.”
Centrica’s shares reportedly fell by 7.5% to 259.92p earlier today – claimed to be the biggest fallers among FTSE 100 stocks.
An initial report from the Competition and Markets Authority (CMA) yesterday revealed the UK’s Big Six energy companies could be overcharging customers by up to £234 a year.