British Gas owner Centrica has reported a 35% slide in profits to £1.75bn after a "very difficult 2014".
The British energy firm, which also owns Direct Energy and Centrica Energy, saw its annual profits fall by more than one third from £2.7bn in 2013.
British Gas profits were down 23% and investors will see their dividend cut by 30%.
Centrica chief executive Iain Conn said a cost cutting mission was in order and vowed to find savings of around £250m in 2015 and a further £150m in 2016.
He blamed "record mild weather" in the UK and falling oil and gas prices for the slump even though overall revenue at was up 11% to £29.4bn.
Conn said: "2014 was a very difficult year for Centrica and the recent fall in oil and gas prices creates further challenge.
"We are cutting investment and costs in response. However, it is with regret that, along with reducing capital expenditure and driving efficiency beyond planned levels, we have taken the difficult decision to rebase the dividend by 30%, commencing with the final distribution for 2014.
"In addition, given the changed external environment we are reviewing the longer term strategy, and will conclude this by the Interim Results in July.
"Despite the obvious current challenges, I am confident in the quality of Centrica's team and the platform which has been established, and I believe the Group is well-placed to take advantage of the longer term trends in the global energy markets.
"Our priorities remain to serve our customers competitively and with integrity, to develop new offers and services, to provide secure and reliable energy supplies and to deliver long term value for shareholders."