* Raises 2016 EPS forecast by 6.5 pct to 16.5 pence
* 2016 adjusted operating cashflow upgraded to 2.4-2.6 bln
* Q4 trading business strong on power volatility
(Adds details, background, share price)
By Karolin Schaps
LONDON, Dec 15 Centrica, Britain's
largest energy supplier, lifted its annual profit forecast on
Thursday after its trading division reaped the benefits of big
price swings in the European power market and it managed to save
more money than expected.
The utility, which owns household energy supplier British
Gas, raised its 2016 adjusted earnings per share expectations by
6.5 percent to 16.5 pence and said adjusted operating cashflow
would come to 2.4-2.6 billion pounds ($6.3 billion), compared
with more than 2 billion pounds it previously expected.
The news sent its shares to a two-month high of 228 pence,
up 4 percent, at 0936 GMT, the biggest gainer on the FTSE 100
index of leading shares.
"Our performance in the second half of the year has been
strong and we expect to exceed our 2016 targets," said Chief
Executive Iain Conn in a results statement.
Centrica's trading business did especially well in the
fourth quarter as it benefited from power price volatility and
making best use of its flexible gas contracts, it said.
The unexpected outages of several nuclear power plants in
France over safety fears brought turmoil to the European power
markets in recent weeks, with French and German day-ahead
electricity prices spiking to multi-year highs.
Centrica acquired Danish energy trading company Neas earlier
this year as part of a strategy to expand its energy trading
exposure which paid off this quarter.
The utility also said tighter spending controls would boost
its bottom line, with full-year capital investment now expected
at around 900 million pounds, lower than the 1 billion
Cost cuts also include thousands of job losses, with around
3,000 job cuts made since last year as part of plans to shed
6,000 jobs by 2020.
The company and its competitors among Britain's "big six"
suppliers have been able to regain some customers from small
rivals as a rise in wholesale prices has put independent firms
under pressure and forced them to increase tariffs.
Centrica said household account numbers were flat since its
half-year update when it said it had lost 399,000 customers in
the first six months of 2016 to 26.4 million.
Its British Gas business said this month that it had frozen
standard energy prices this winter.
($1 = 0.7970 pounds)
(editing by Susan Thomas and Keith Weir)