Half-year earnings fall at Centrica

(Sharecast News) - British Gas-owner Centrica posted softer first-half earnings on Thursday, weighed down by production outages and Spirit Energy disposals. The blue chip said earnings before interest, tax, depreciation and amortisation fell to £737m in the six months to 30 June, from £900m, while adjusted operating profits slid to £497m from £549m.

Centrica said the year-on-year decline had been driven predominantly by lower realised prices in nuclear, outages and the sale of the majority of Spirit Energy's assets.

Centrica, which owns 69% of Spirit Energy, has been selling off assets as it looks to streamline its portfolio and end North Sea gas production. "The team is now focused on producing the remaining gas at Morecambe safely and efficiently, decommissioning while minimising the environmental impact and progressing the Morecambe Net Zero project," it confirmed.

The infrastructure division also houses Centrica's nuclear interests, including the new development at Sizewell C. Nuclear generation volumes were 11% lower in the first half, driven by planned outages alongside higher levels of unplanned outages

In retail, adjusted EBITDA rose 2% to £346m, after an improved commercial performance and higher prices were partially offset by a rise in bad debt.

Chris O'Shea, chief executive, said: "Our journey to create a higher quality, more valuable Centrica continued during the first half. Our operational foundations are strong, commercial performance is improving and we continue to progress our transformation programme as we drive efficiency through the organisation.

"Volatility across energy markets has created challenges in some parts of our business, and some of our delivery has been slower than we would like.

"However, we have continued to invest with discipline to strengthen our portfolio and support long-term growth."

Looking to the full year, Centrica said that adjusted EBITDA in the retail arm was likely to come in towards the lower end of its guidance range, of between £500m and £800m, while infrastructure was slated to deliver earnings between £650m and £750m.

See latest RNS on Investegate