13th Nov 2019 08:11
(Alliance News) - SSE PLC on Wednesday said it has made "encouraging" progress as it returned to profit for the first half of its financial year.
FTSE 100 utility SSE, which is based in Perth, Scotland, has also increased earnings guidance for the full year ending March 2020.
For the six months to September 30, SSE posted a pretax profit of GBP128.9 million from continuing operations, after a GBP284.6 million pretax loss a year before. Adjusted, pretax profit rose 15% to GBP263.4 million.
SSE's loss a year before was caused by a GBP500 million exceptional charge which included impairments and costs related to an attempt to de-merge its retail business, SSE Energy Services.
This has since been sold to Ovo Energy, and SSE said Wednesday it expects the sale to complete in early 2020. Results released Wednesday exclude this business.
SSE's revenue has declined by 8.1% to GBP3.05 billion.
It has reduced the interim dividend by 18% to 24 pence, but said this was in line with a dividend adjustment announced in March 2018. For the full year, SSE sees a dividend of 80p, as already outlined, compared to 97.5p in its previous financial year.
Looking forward, the company has upped adjusted earnings per share guidance for the year to between 83p and 88p, from a previous range given in September of 80p to 85p.
SSE said the structure of its Energy Services sale means hedging contracts will be retained, adding 3p to earnings per share. Further, the European Commission's approval of the UK capacity market means forecast adjusted earnings per share is no longer subject to receiving suspended capacity market payments.
"SSE is progressing well in the execution of its low-carbon strategy with the sale of SSE Energy Services leading to group more focussed on renewable energy and regulated electricity networks," said Chair Richard Gillingwater.
"SSE Renewables has an enviable development pipeline bolstered by recent success in securing valuable contracts for difference and we have strong business plans for the upcoming transmission price control. Our growth is aligned to net zero emissions and looking ahead to COP 26 in Glasgow next year, we will be encouraging even faster decarbonisation."
"Clearly some headwinds remain in the sector with political uncertainty and aspects of UK government policy being subject to judicial process, however, we have strong optionality to create value through the low carbon transition and deliver our dividend commitments," Gillingwater continued.
Shares were 0.4% lower in early trade on Wednesday in London at 1,285.50p each, reversing after starting slightly higher.
By George Collard; [email protected]
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