Centrica (CNA) was already coming out of a rough 2019 when it swung to a £849m statutory operating loss, weighed down by £1.1bn in net exceptional charges. Unfortunately, the pressure didn’t ease up in the six months to 30 June. Reported earnings were once again blighted by hefty exceptionals – this time totalling £1bn – reflecting restructuring costs and a £381m impairment of its exploration and production (E&P) assets. This translated to a £135m operating loss, albeit narrower than the £446m loss seen a year earlier.
On an adjusted basis, operating profit fell by 14 per cent to £343m. The net impact from Covid-19 is estimated to be £60m amid lower overall energy consumption and higher provisions against bad debt. Falling commodities prices also triggered a £190m hit to the upstream division.
Net debt was reduced by 13 per cent from the December year-end position to £2.8bn. Having struck an agreement to sell its North American energy supply business to NRG Energy for $3.6bn (£2.9bn), net debt should fall further still. The final dividend declared for 2019 was scrapped back in April and there’s no interim payout either. New chief executive Chris O’Shea says Centrica will look to dispose of its share of the UK’s nuclear assets and its E&P business, Spirit Energy, “at an appropriate time”.
RBC Capital Markets anticipates adjusted EPS of 4.3p for the full year, down from 7.3p in 2019.
| CENTRICA (CNA) | ||||
| ORD PRICE: | 49.3p | MARKET VALUE: | £ 2.9bn | |
| TOUCH: | 49.2-49.4p | 12-MONTH HIGH: | 95p | LOW: 29p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 16p* | NET DEBT: | £2.8bn | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 11.6 | -569 | -9.6 | 1.5 |
| 2020 | 10.7 | -264 | -3.3 | nil |
| % change | -8 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes £4.3bn in intangible assets or 74p a share | ||||
