Centrica hit by further unplanned outages

22nd Nov 2018 07:23

(Sharecast News) - Centrica warned that full year financials would be dented after weaker energy production volumes and the loss of 372,000 home energy supply accounts in the third quarter, though the British Gas owner still expects to hit its full year targets.While full year guidance for operating cash flow, net debt, efficiencies and dividends remained unchanged, the FTSE 100 group said its results will be affected by outages in the recent quarter at its Spirit Energy exploration and production joint venture, and at its nuclear division.Operational issue and unexpected outages at Spirit Energy have led to full year forecasts being cut to roughly 47.5m barrels of oil equivalent per day from the guidance of around 50mmboe given at the interim results. Spirit Energy, the 69%-owned JV, had also been below expectations during the first half due to unplanned outages and increased remediation spending.Centrica said oil and gas production for 2019 is currently expected to be at "broadly similar levels to 2018". Initial guidance at the formation of the JV was that production would be 45-55mmboe in the medium term.In the nuclear business, performance was impacted by "extended inspections and outages" at the Hunterston B and Dungeness B power stations, with an expected full-year impact of around 0.2TWh since the interim results. Volumes in the first half had been hit by outages on the Hunterston B reactorThere was no update on Centrica attempts to sell its 20% interest in the fleet of nuclear power stations.By the end of October, the group has made annualised efficiencies of £189m and said it remained on track to deliver over £200m by the end of the year."As we have done over the last four years, we are focused on driving significant underlying improvements in performance and delivering attractive returns while re-positioning the portfolio towards the customer," said chief executive Iain Conn.He said efficiencies and new customer propositions were "helping to offset the effects of strong competition and regulation in energy supply", though financial performance has "remained resilient" despite weaker than planned volumes from E&P and nuclear and that cash generation "remains strong".