British Gas owner says “challenging” environment amid customer loss

0
108

LONDON, May 13 (Xinhua) — British Gas owner Centrica said on Monday that trading environment has been challenging in the first four months of this year, after losing 234,000 UK customers due to a higher energy price cap.

Centrica, parent of British Gas, the largest energy supplier in Britain, said there was a spike in customer churn in March and April following the announcement of a significant increase in the level of the default tariff cap.

UK energy regulator, the Office of Gas and Electricity Markets (Ofgem), introduced in January a cap on default tariffs designed to protect consumers from overpaying on their energy, and announced in February that the cap would be revised to 1,254 pounds (1,632 U.S. dollars) a year, an increase of 117 pounds, starting in April.

The move becomes controversial as some blame the price cap has become an excuse for a price rise while Centrica said the cap will affect its profits, expecting a 70 million pounds reduction in the first quarter of this year.

“Although operational performance has been largely in line with our plans, external factors have presented challenges for Centrica during the first four months of 2019, in the form of the default tariff cap, warm weather, and falling gas prices. We have also experienced extensions to nuclear outages,” Iain Conn, Centrica Group Chief Executive said.

The FTSE 100 company said while a number of the factors leading to the challenging trading environment are temporary in nature, they will impact financial performance in the first half of 2019 and have also put some further pressure on the outlook for the full year.

Still, Centrica said it will meet its full-year targets on operating cash flow and net debt, with cost efficiency delivery expected to accelerate in the second half of the year and a continued focus on capital discipline.