Annual profits at British Gas owner Centrica have fallen 35% to £1.75 billion in a “very difficult year” for the company, it said today.
Profits from residential energy supply were down 23% to £439 million as the warmer weather meant each household spent around £100 less on bills than in 2013.
Iain Conn, the former BP executive who took over as Centrica boss last month, said the company would cut investments and slash costs. He has launched a strategic review of the business.
He said the group had taken the “difficult decision” to rebase its shareholder dividend. The full-year pay-out for 2014 will be 21% lower at 13.5p.
Mr Conn said: “2014 was a very difficult year for Centrica and the recent fall in oil and gas prices creates further challenge. We are cutting investment and costs in response.”
Centrica reported a statutory pre-tax loss of #1.4 billion as it wrote off #1.4 billion of assets, half in power and half in the North Sea, as low oil and gas prices hit its energy generation arm.
The group said it was closing power stations at Killingholme and Brigg, both in Lincolnshire, but has decided to retain units at Humber and at Langage, in Devon.
It said it had tried to sell Langage, Humber and Killingholme but bids received were “significantly lower” than its valuation.
Mr Conn said Centrica earnings were expected to fall again in 2015.
His review of long term strategy is expected to be concluded by the time of interim results in July.