* Adjusted operating cashflow to rise 3-5 pct a year
* Shares up 3.9 pct in London
* 2015 adjusted earnings per share at 17.2 pence
* Cuts 2016 E&P capex to 500 mln pounds
(Adds CEO, analyst quotes)
By Karolin Schaps
LONDON, Feb 18 (Reuters) - British Gas owner Centrica
CNA.L has pledged more cost cuts if necessary this year to
continue paying its shareholders as it reported a 4 percent fall
in 2015 adjusted earnings due to decade-low energy prices.
The utility, Britain's largest household energy supplier,
said that despite weak energy prices it was confident it would
meet its target of growing adjusted operating cashflow by 3-5
percent annually, targeting a figure above 2 billion pounds
($2.86 billion) this year.
That compares with around 1.7 billion pounds in 2015.
"The dividend will remain covered by operating cash flow
even at current low commodity prices," said analysts at
Jefferies. The utility trimmed its dividend last year.
Shares in Centrica were trading up 3.9 percent at 201.6
pence at 0929 GMT, the biggest gainer on Britain's bluechip FTSE
100 index .FTSE .
Centrica's full-year adjusted earnings per share came to
17.2 pence, slightly ahead of expectations, as it booked pretax
charges of 2.4 billion pounds ($3.4 billion) for writing down
the value of oil and gas assets and power stations.
Electricity and gas prices in Centrica's core British market
have slumped due to low demand and its oil and gas production
unit has suffered from the lowest oil prices in over a decade.
Many utilities across Europe are at a crossroads requiring a
new business strategy as the decades-old model of centralised,
predictable energy production and consumption is giving way to a
modern and more flexible energy system.
Centrica's strategy, led by ex-BP man Iain Conn over the
past year, is to shrink its oil and gas production business and
focus instead on providing better products to its end-consumers.
The utility has cut 2016 capital investments in its E&P
(exploration and production) unit, its most capital intensive
one, to 500 million pounds this year from around 700 million
pounds spent in 2015. It said it could lower that spending
closer to 400 million if needed.
Centrica said it was in no rush to sell its Canadian oil and
gas assets, which it had previously singled out for disposal.
"It's a very challenging time to sell assets in E&P and it's
probably not a very wise time to sell assets given where prices
are," Conn told reporters on a conference call.
The company announced last year it would shed a net 4,000
jobs by 2020, most of them in Britain. Around 2,000 of those
cuts have already been made and another 1,000 jobs will follow
this year, Centrica said.
Britain's energy suppliers also face tighter regulation on
the back of a competition investigation that could impose a
limit on their most expensive energy tariffs.
British Gas, which will reduce gas tariffs by 5.1 percent
from March 16, is experiencing tough competition from smaller
energy suppliers and lost 119,000 customer accounts in 2015.
"All these new suppliers are nipping away at our ankles
trying to take market share. We're trying to reduce the number
of customers we lose," Conn told journalists.
($1 = 0.6990 pounds)
(Editing by Mark Potter, Keith Weir and Adrian Croft)