Centrica profit drops nearly 40% as gas market weakens; buybacks halted
Centrica trims returns as gas prices and trading headwinds bite
Immediate result: Centrica delivered £1.42 billion in EBITDA for fiscal 2025 while reporting an almost 40% fall in full-year profit. Management linked the shortfall to a weaker commodity backdrop and volatile trading conditions that constrained earnings.
Operational response: The company has placed its share buyback programme on hold and signalled a more defensive capital approach for the near term. That choice preserves cash but reduces shareholder returns in the current cycle.
Trading environment: Lower gas benchmarks, combined with ongoing geopolitical uncertainty, reduced margins across Centrica’s portfolio — from retail supply to wholesale trading — and made price discovery harder for the group’s trading arm.
Financial snapshot: EBITDA of £1.42bn converts to roughly $1.9bn, underscoring the scale of earnings still being produced despite the contraction. The profit decline was the headline metric that triggered market attention.
Strategic implications: Pausing buybacks increases flexibility to cover working capital swings and protect the balance sheet if gas prices remain depressed. It also signals management expects continued near-term market volatility rather than a quick rebound.
- Liquidity preserved through halted share repurchases.
- EBITDA remains positive but reduced versus prior-year levels.
- Commodity and trading volatility identified as primary earnings drivers.
Market reaction and next steps: Investors will watch guidance, hedging disclosures, and trading performance for signs of stabilization; any extension of weak gas pricing would keep pressure on margins. Management faces a trade-off between restarting buybacks and shoring up capital against further downside.
Read Our Expert Analysis
Create an account or login for free to unlock our expert analysis and key takeaways for this development.
By continuing, you agree to receive marketing communications and our weekly newsletter. You can opt-out at any time.
Recommended for you
Rio Tinto profit flat as copper gains fail to fully offset weaker iron ore
Rio Tinto reported underlying annual earnings of $10.87 billion, roughly unchanged year-on-year and below the Visible Alpha consensus of $11.03 billion. Strong copper prices and higher copper output helped offset a drop in iron ore contribution, but cost inflation in Pilbara and a share-price decline underline near-term investor pressure.
Big Oil pivots from buybacks to reserve-led growth
Wider-than-expected weakness in fuel demand and a roughly 20% fall in crude prices have pushed majors to reallocate capital from discretionary share buybacks toward replacing and growing reserves while protecting regular dividends. The shift is visible in company-specific moves — including Shell scaling back loss-making renewables — and in a wave of North Sea asset purchases by buyers such as Vitol and TotalEnergies, underscoring a tactical tilt back to conventional upstream investment.
European oil majors face a shareholder squeeze as earnings and cashflows soften
Several leading European oil companies are confronting weaker quarterly results and compressed free cash flow, forcing them to prioritize capital allocation. Firms are expected to preserve dividend payouts while curbing share repurchases and delaying certain capital projects, with potential implications for low-carbon investments and balance-sheet resilience.
Shell pivots back to oil after costly renewables run falters
Shell announced a strategic retreat from loss-making clean-energy projects and signaled a renewed focus on oil and gas production after renewable assets posted substantial losses. Management framed the move as part of tighter capital discipline amid an industry-wide push by European majors to protect dividends and curb buybacks as cash generation weakens.
UBS posts strong quarter as Novo Nordisk caution triggers a wider market pullback
UBS delivered a surprising Q4 profit beat and announced a $3 billion buyback, reinforcing a conservative recovery in Swiss banking. Separately, Novo Nordisk’s softer outlook sent its U.S.-listed shares tumbling and contributed to a sell-off in software and asset-management stocks that dragged major U.S. indexes lower.
Palo Alto Networks trims profit outlook after M&A costs; raises revenue guide
Palo Alto Networks reduced its full-year adjusted EPS outlook, citing elevated integration and deal-related expenses tied to recent acquisitions, and saw its stock fall nearly 8% in after-hours trading. The company simultaneously lifted its revenue target and projected stronger near-term top-line results, reflecting demand for modern security tools amid AI-driven threat concerns.
Asda’s turnaround under pressure as sales and market share slide in the UK
Asda reported a significant downturn over the critical Christmas trading period, with industry data showing falling sales and a loss of market share. Heavy debt, costly system changes and damaged customer perceptions mean the retailer faces an uphill battle to restore volume and profitability.
Keyera posts strong fee-for-service margins and advances Plains Canadian NGL deal
Keyera closed 2025 with elevated fee-for-service margins and completed strategic portfolio moves while preparing to integrate Plains' Canadian NGL assets. Near-term headwinds include a planned equipment replacement outage at an iso-octane facility that will dent 2026 marketing margins and shift timing of maintenance work.