Centrica reports resilience in face headwinds aided by LNG activity

Tuesday, 26 January 2021
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LNG News Editor: 

Centrica plc, the UK utility and energy company with a growing LNG market presence, reported a resilient financial performance in the second half of 2020 as the trading and optimisation performance continued to be strong, especially in LNG.

Centrica, the owner of the British Gas utility and whose LNG portfolio includes booked volumes from the US and Mozambique, said its activities were marked by the maintenance of a tight focus on cash generation and expenditure against the backdrop of Covid-19.

Restructuring

“The significant restructure announced in June remains on track, and trading and optimisation performance continued to be strong, in particular in our LNG business,” said Centrica in its update to investors.

“At the end of 2020 we had 6.9 million UK energy supply customers and 3.6M UK services customers, both broadly unchanged since the half year,” added Centrica.

The company stated that Covid-19 continued to impact financial performance, although as expected the gross impact was lower in the second half of 2020 than in first half.

“UK business electricity demand was negatively impacted by around 15 percent in the second half compared to around 30 percent in the second quarter,” said Centrica.

Centrica said that it remained cautious entering 2021, with the return of tighter Covid-19 restrictions in the UK and Ireland expected to put continued pressure on business energy demand and limit the workload of services.

“In addition, the related uncertain economic backdrop increases the potential for additional working capital outflow and higher bad debts,” it added. Centrica, which holds import capacity at the Isle of Grain LNG terminal southeast of London, has been increasing its carrier fleet operations.

It recently signed a seven-year time charter with Greek shipping line GasLog for the “GasLog Westminster”, a 180,000 cubic metres capacity carrier with X-DF propulsion and a Mark III Flex containment system.

Centrica has also signed a long-term contract for 15 years to sell 500,000 tonnes per annum of LNG to the Shenergy Group of China. The company is due to release its 2020 preliminary results on the 25th of February.

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