Rating agency Moody’s has downgraded ratings of Centrica’s debt.

In a note it said that British Gas’s owner had seen profit fall by 35% in 2019, due to the default tariff cap, low wholesale gas prices and nuclear outages.

While cash from was within target ranges, “the deterioration in earnings is evidence of a continued difficult operating environment in Centrica’s key markets,” the note said.

The default tariff cap has put pressure on earnings and so pressure on margins from intense competition, Moody’s said, although the rate at which Centrica is losing domestic accounts has slowed.

Elsewhere in the business, the Services division saw an increase in the number of accounts and margins, and the Energy Marketing and Trading (EM&T) division saw results boosted by good European trading and optimisation performance. But in the UK Centrica continued to incur operating losses in the Business Solutions and Home Solutions divisions, and earnings from Upstream were down by 68%.

The company aims to make £1 billion in savings across 2019-2022, rebase dividend payments and sell ‘non-core’ asset sales. That will incur  significant restructuring costs over the medium term but are supportive of Centrica’s credit quality long term, the agency said.

Centrica has the Spirit Energy exploration and production business and its nuclear interest up for sale. But Moody’s said it was not clear what they would realise, the recent drop in commodity prices and with prolonged outages at nuclear power plants.

Moody’s says the rating outlook is stable, which “Reflects Moody’s expectation that Centrica will be able to navigate the challenges in its markets, including because of the recent drop in commodity prices, and will take measures, as these may be necessary, to shore up its financial profile.”