(MENAFN- ProactiveInvestors - UK) Centrica (LON:CNA) predicted a hit from low oil prices for its exploration division in the second half and said it would cut 3,000 jobs this year.
The British Gas owner said commodity prices remained at low levels despite recent increases.
"This will inevitably have an impact on the earnings and cash flow from our E & P and central power generation (CPG) businesses in the second half of 2016, as historic hedges roll off," it said in
Its E & P focus is on Europe and it has begun a process to dispose of its Canadian assets, alongside partners Qatar Petroleum.
"We also continue to review options to dispose of our Trinidad and Tobago assets," it said.
First-half adjusted earnings fell 14% to 507mln, mainly reflecting extreme warm weather in North America and the impact of low commodity prices on E & P and CPG, partially offset by cost efficiency.
Revenue fell 13% to 13.38bn compared to the same period last year. Adjusted operating profit fell 12% to 853mln.
Group adjusted operating cash flow is expected to be more than 2bn in 2016.
Capital investment, including small acquisitions of less than 100mln each, is anticipated to be no more than 1bn in 2016, of which around 500mln is expected to be spent in E & P.
It expects to save about 300mln in 2016 as part of the group's 750mln per annum cost efficiency programme, with like-for-like operating costs expected to be lower in 2016 than in 2015.
Like-for-like direct headcount is expected to reduce by around 3,000 in 2016.
The group increased the interim dividend per share by 1% to 3.60p.
It lost 399,000 customers in the period as an increasing number of people switched suppliers to reduce their bills.
Centrica blamed the drop in customers partly on people coming to the end of fixed-term contracts.
It said it returned to account growth in June following the launch of new contracts.
"We will continue our focus on developing innovative products, differentiating our offer and giving our residential and business customers more choice," the company said in a statement.
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