Sector News

Centrica posts profit in 2016, lays off 3,400 staff

February 23, 2017
News

Energy and services firm Centrica today revealed that it had returned to profit in 2016.

The company, whose brands include British Gas, said it had made £384million worth of cost savings during a year in which it laid off more than 3,400 employees.

Read: Centrica to cut 90 positions from its European operations including Aberdeen, Morecambe Bay

It expects to achieve a further £250million of savings in 2017.

Centrica’s job cuts total 3,000

Centrica also said it had continued to shift investment from exploration and production (E&P) to “customer-facing activities”.

Its spending on E&P dropped 28% to £518million during the 12 months.

Part of that E&P capex was focused on the southern North Sea Cygnus project, which delivered first commercial gas in December 2016.

Centrica has a 49% stake in Cygnus, which is expected to ramp up towards peak production during 2017.

Operator Engie E&P UK holds 38.75%.

The company completed the sale of the Lincs wind farm during the year, and announced the divestment of its Trinidad and Tobago E&P business.

It aims to offload its Canada E&P unit in 2017.

Centrica achieved pre-tax profits of £2.19billion, a marked improvement on a deficit of £1.14billion in 2015.

Revenues at Centrica dipped 3% to £27.1billion, while group operating profits rose to £1.46billion from £1.39billion.

Net debt came down 27% to under £3.5billion.

Centrica chief executive Iain Conn said: “2016 was a year of robust performance and progress in implementing our customer-focused strategy.

“We delivered our key objectives including improved customer service and more innovative offerings and solutions – while repositioning the portfolio, building capability and driving significant cost efficiencies.

“2016 was a busy year for the team, but we have delivered a lot, and Centrica enters 2017 a stronger company – with encouraging underlying momentum and positioned to deliver longer-term returns and growth.”

By Mark Lammey

Source: Energy Voice

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