May 14, 2018

Broken boilers ramp up costs for British Gas owner Centrica

Centrica, the owner of British Gas, said the extreme cold weather boosted energy demand but led to higher call-out costs for broken boilers in the opening four months of this year, while customer numbers continued to shrink. Additional call-out costs due to the cold weather are expected to result in a lower adjusted operating profit for the first half in the division compared with the year before. Centrica also reiterated that it expects to maintain its dividend this year, allaying the concerns of investors who have been concerned about the company's ability to maintain its payout. Iain Conn, Centrica chief executive, said: "2018 has begun well and overall financial performance in the year to date has been good, despite high competitive intensity in all our marketsWhile the outcome of regulations to impose a temporary cap on all default energy tariffs in the UK remains uncertain, we continue to participate actively in the consultation process. Our focus remains on performance delivery and financial discipline and we remain on track to achieve our 2018 Group targets." Centrica also said full year production from its oil and gas exploration and production joint venture Spirit Energy was expected to be in the lower half of its 2018 targeted range of 50-55m barrels of oil equivalent as a result of unplanned outages and production issues on certain fields.

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