Shares in Centrica slide after customers leave, energy output slips

LONDON (Reuters) - Shares in Britain's Centrica CNA.L tumbled 9 percent on Thursday after the energy supplier reported losing customers, lower nuclear power generation and a fall in output at its oil and gas division.

A British Gas sign is seen outside its offices in Staines in southern England, July 31, 2014. REUTERS/Toby Melville/File Photo

The owner of Britain’s largest energy supplier British Gas said it would still meet its 2018 group targets that were set out in February.

But that failed to reassure investors. The shares fell to 131.90 pence, their lowest level since March.

Centrica’s British home energy supply business, which includes British Gas, lost 372,000 customers in the four months to the end of October.

Britain’s big six energy suppliers have been losing business to smaller rivals, which often offer lower prices and have lifted their market share to 30 percent from 1 percent six years ago.

British energy suppliers are also facing a price cap on the most commonly used tariffs from Jan. 1, a move regulator Ofgem said would save households around 1 billion pounds ($1.3 billion) a year.

Centrica said the cap would lead to a one-off negative adjusted profit impact of about 70 million pounds in the first quarter of 2019.

Forecast 2018 production at Centrica’s exploration and production division’s Spirit Energy fell to about 47.5 million barrels of oil equivalent (mmboe) from around 50 mmboe due to unplanned outages and operational issues.

Centrica’s share of full year-nuclear generation from its 20 percent stake in EDF’s British nuclear plants was expected to be 0.2 terrawatt hours lower since the February interim results due to outages at the Hunterston B and Dungeness B power stations.

The Hunterston unit, which can produce enough electricity to power more than 800,000 homes, has been offline since March when cracks were found in its core during a routine inspection.

Centrica has gained 280,000 customers in its connected home division since the start of the year and said it was on track to achieve cost savings of around 200 million by the end of 2018.

Europe’s General Court ruled last week Britain must halt payments made under its capacity auction scheme aimed at avoiding electricity shortages pending a further investigation by European Union regulators.

Centrica said it was awaiting further updates from the British government to determine the full implications for the capacity contracts it has at nuclear, battery and gas-fired generation assets.

($1 = 0.7828 pounds)

Reporting by Susanna Twidale; Editing by Jason Neely and Edmund Blair