12th Nov 2014 07:46
LONDON (Alliance News) - SSE PLC Wednesday said it has increased its interim dividend despite pretax profit falling during the first half of the year due to warmer weather, lower electricity output and weak gas prices.
For the six months ended September 30, the company's pretax profit fell 6.2% to GBP316.6 million compared to GBP337.4 million a year earlier, mainly driven by a GBP22.1 million loss from its share of joint ventures and associate tax, compared to a GBP40.3 million profit in the first half of 2013 and warmer weather.
"The weather in the UK and Ireland has an effect on business operations including variations in customer demand for energy, changes in the volume of electricity generated and, potentially, disruption to power supplies as a result of weather-related damage to the electricity networks," SSE said.
SSE increased its interim dividend by 2.3% to 26.6 pence per share, compared to the 26.0 pence per share dividend paid in the previous year. SSE plans to deliver annual dividend increases at least in line with inflation over the coming years, it said in its statement.
The wholesale division saw operating profit decline by 83% during the first half to GBP26.7 million. This was mainly caused by lower output of electricity from renewable and thermal sources and by lower gas prices.
For the second half of 2014 and 2015, the company aims at making its wholesale division flexible and sustainable, said SSE.
The networks division saw operating profit rise by 4.7% during the half to GBP258.4 million, reflecting the company's investment in its electricity transmission asset base and improved efficiencies in its gas distribution.
The company's outlook for the network division is to make it more efficient throughout the next year and a half.
The retail division saw the biggest shift, swinging to an operating profit of GBP37.3 million compared to a GBP71.4 million loss in the first half of 2013. The change was mainly attributable to a reduction in the operating loss in energy supply which reflects a number of factors including lower energy purchasing costs, which were partially offset by the impact of mild weather.
Capital expenditure was reduced by 15.5% to GBP679.3 million during the half and it plans to continue to lower costs throughout the next financial year, it said.
"The outlook for the energy industry - and the energy supply market in particular - remains challenging. However, with an unprecedented, unconditional price freeze lasting through this winter and into next, a bold brand strategy to engage customers and stakeholders, and an ongoing commitment to delivering sustained value and industry-leading standards of service, SSE is responding positively to this challenge," it said in a statement.
By Joshua Warner; [email protected]; @JoshAlliance
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