February 21, 2019 / 7:54 AM / a month ago

Britain's Centrica says energy bill price cap to hurt 2019 results

FILE PHOTO: Electricity pylons are seen in London, Britain August 1, 2017. REUTERS/Neil Hall/File Photo

LONDON (Reuters) - Britain’s Centrica warned on Thursday a national price cap on energy bills and a fall in nuclear output and volumes at its oil and gas division would hit its 2019 results, sending its shares down 8 percent.

Reporting a 12 percent rise in 2018 operating profit, Centrica, owner of Britain’s largest energy supplier British Gas, said a cap on standard energy prices would lead to a one-off negative adjusted profit impact of about 70 million pounds ($91 million) in the first quarter of 2019.

Late last year Centrica said it would seek a judicial review of the way regulator Ofgem calculated part of the price cap, which was initially set around 6 percent lower than British Gas’ standard variable tariff.

Ofgem this month said the cap will be raised by 10 percent from April 1, and British Gas has already said it will increase its prices by the same amount.

The company also said it would sell Clockwork Inc, its North American franchisee home services business, for $300 million after a slower than expected recovery in its North America business in 2018.

Total consumer account holdings fell 1 percent in 2018, the company said in a statement, although adjusted operating profit rose 12 percent to 1.39 billion pounds bolstered by higher commodity prices.

Volumes at Centrica’s Spirit Energy are expected to remain in the lower half of its 45-55 million barrels of oil equivalent (mmboe) range.

Meanwhile, output from the company’s 20 percent stake in Britain’s nuclear plants were still affected by current outages, Centrica said.

Reporting by Susanna Twidale in London and Devika Syamnath in Bengaluru; Editing by Bernard Orr and Emelia Sithole-Matarise

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