Britain's largest energy supplier Centrica canceled its 2019 dividend and cut costs in anticipation of an increase in nonpayments by customers and a drop in demand due to the COVID-19 outbreak, sending its shares to record lows.
The government has ordered sweeping measures to slow the spread of the new coronavirus, shutting down much of the economy and raising the prospect of mass job losses.
Shares in the company hit 34.35 pence on Thursday, morning, their lowest level since the company's inception in 1997.
"We also expect to see an increase in working capital outflows and customer bad debt, as certain customer segments defer payments due to the reduction of household incomes and business revenues," Centrica said on Thursday.
Britain's energy trade association Energy UK earlier this week called on the government to offer financial support to energy suppliers to help them offer payment breaks to those struggling with bills.
The utility also said the situation made it more challenging to move ahead with its plans to divest its 69% stake in oil and gas producer Spirit Energy.
"We were due to receive initial bids for Spirit Energy around the end of March, however, we have taken the decision to pause the process until financial and commodity markets have settled," Centrica said.
Oil and gas prices have plummeted due to concerns over ongoing weak demand, with benchmark contracts losing around two-thirds of their value in the past quarter.
Centrica had previously hoped to sell its stake in Spirit Energy and its 20% stake in Britain's nuclear fleet by the end of 2020.
The company has stopped or delayed all new non-critical capital expenditure projects in its customer-facing divisions, bringing down its capital spend to around 600 million pounds ($743.76 million) from 800 million pounds forecast earlier.
Centrica also said it was putting off the decision to pay employee cash bonuses relating to 2019 until the outlook becomes clearer, while implementing a pay freeze for most non-customer facing colleagues.
It has delayed over 100 million pounds of restructuring spend as well, and decided earlier this year to award no bonuses to directors for 2019. ($1 = 0.8067 pounds)
(Reporting by Susanna Twidale in London and Muvija M in Bengaluru; editing by Bernard Orr, Vinay Dwivedi and Philippa Fletcher)
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