Centrica shares down 5% on news of Canadian divestment to Qatar Petroleum
08 May 2014
Centrica shares were down by nearly 5 per cent at market open following the Big Six energy provider saying it was selling 40 per cent of its Canadian natural gas business for £107 million.
Centrica operates under the trading names Scottish Gas in Scotland and British Gas in the rest of the UK.
The Centrica stock price was down sharply 4.7 per cent to 313.00p, before it staged a slight recovery to 313.50p, after revealing that Qatar Petroleum International would buy the stake.
International Business Times quoted Sam Laidlaw, CEO at Centrica as saying he was delighted that the company was further strengthening the relationship between Centrica and Qatar Petroleum.
He added, the company looked forward to continuing to work together as it considered investment opportunities in gas and power on both sides of the Atlantic.
Nasser Al-Jaidah, chief executive officer of Qatar Petroleum, added, the company was to have expanded its strategic alliance with Centrica through the acquisition. He added, the agreement demonstrated Qatar Petroleum's strong commitment to further its existing global partnerships and forge new opportunities where possible.
The companies said the governance of the CQ Energy Canada Partnership joint venture would remain unchanged.
Meanwhile, Centrica issued its second profits warning in six months today as it announced it would not hike prices for British Gas customers this year, The Telegraph newspaper reported.
The energy giant blamed weather conditions in the UK and the US as it said group profits would be 10 per cent below market expectations, sending shares down over 3 per cent in morning trading.
Profits from the company's household energy supply business would be expected to be down by a quarter, to £425 million, after customers turned down their heating during the unusually warm start to the year.
Gas consumption fell 25 per cent in the first four months of the year, and electricity was down 10 per cent. The supplier also lost 180,000 customer accounts with households switching to cheaper rivals.
According to British Gas, the combination of lower wholesale gas and electricity prices and ''the competitive conditions in the UK energy supply market'' meant it did not expect to change prices this year.
British Gas might typically have been expected to increase prices to protect its target profit margin of 5 per cent after tax, however, increases were now seen as virtually impossible in the current political climate.
This year would be the first year it had not increased prices since 2009 and its post-tax profit margin, consequently, was expected to fall to 4 per cent with British Gas profits expected to be their lowest since 2008.
