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Extended outage to push Centrica's storage business deeper into red - analysts
April 13, 2017 / 10:43 AM / 8 months ago

Extended outage to push Centrica's storage business deeper into red - analysts

LONDON, April 13 (Reuters) - Britain’s largest energy supplier Centrica could face a more than 100 million pound ($125 million) hit to its bottom line after announcing an extension to an outage at its Rough storage field, analysts said.

Centrica had closed the storage site, a depleted gas field in the North Sea, to gas injections on concerns about the safety of some of its wells. On Wednesday, it extended the outage to April 2018 from June 2017.

The utility had already warned in February that its storage business, which swung to an operating loss for a first time last year, would slip further into the red this year because of the problems at the Rough site.

Analysts are now expecting those losses to come in at the higher end of the spectrum as the extended outage will curb revenue Centrica would have made from gas traders storing fuel.

“The direct impact on Centrica will be a likely EBIT loss of in excess of 100 million pounds ($125 million) in 2017 for the storage division,” said analysts at RBC Capital Markets.

Barclays analysts echoed the assessment, saying the unit’s loss will likely be closer to Centrica’s worst-case scenario of a 110 million pound loss.

Analysts at Credit Suisse said the news meant it had reduced Centrica’s Earnings Per Share (EPS) forecast by 0.6 pence per share.

Shares in Centrica, which runs operates the British Gas brand, were down 1 percent at 0955 GMT, slightly worse than the 0.5 percent loss on London’s FTSE 100 index. ($1 = 0.7975 pounds) (Reporting by Karolin Schaps; Editing by Keith Weir)

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