(Alliance News) - Moody's Investors Service on Friday downgraded Centrica PLC and shifted its outlook to negative, amid a "persistently challenging" environment for the British Gas owner.
Centrica's issuer and senior unsecured ratings were nudged down to Baa2 from Baa1. The outlook was previously stable.
The credit ratings agency said: "The rating downgrade takes account of the persistently challenging environment in Centrica's markets of operations and the resulting deterioration in the company's credit metrics, with financial ratios no longer commensurate with the previous Baa1 rating.
"UK retail energy supply remains challenging. While the pace of decline in Centrica's customer accounts appears to be easing with the number of accounts down 2.4% in 2019, profitability has been heavily impacted by the default tariff cap and further pressure on margins from intense
competition."
In 2019, Centrica's revenue slipped 2.0% to GBP26.83 billion from GBP27.38 billion in 2018. Centrica swung to a pretax loss of GBP1.75 billion from a GBP575 million pretax profit in 2018.
Centrica on Friday said it noted the Moody's rating change.
The company added: "Centrica reaffirms that, as part of its financial framework, it continues to target strong investment grade credit ratings."
Shares in the company closed 0.5% lower at 43.32 pence each in London on Friday.
By Eric Cunha; ericcunha@alliancenews.com
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Centrica (CNA)