- SSE’s adjusted operating profits fell to £2.4bn in the year to March 2024
- The profit decline was driven by its gas and thermal storage division.
SSE’s earnings fell slightly last year along with energy prices due to lower market volatility.
The energy business, formerly Scottish and Southern Energy, revealed its adjusted operating profits fell by around £100m to £2.4bn in the year to March 2024.
This was driven by its gas and thermal storage division, where profits plunged by around a third to £818.9m amid a normalization of energy commodity prices.
Weaker result: SSE, formerly Scottish and Southern Energy, revealed its adjusted operating profits fell by around £100m to £2.4bn in the year to March 2024.
The previous year, the division’s profits nearly quadrupled as the Ukraine war and easing of Covid-19 restrictions caused oil and gas prices to soar.
SSE’s performance was also affected by maintenance work and the timing of the recovery from cost inflation in its distribution division, which consequently saw its profits fall by 29 per cent to £272.1 million.
However, the company’s reported figures showed a stunning turnaround, with a pre-tax loss of £205.6 million in the 2023 financial year turning into a profit of £2.5 billion this time. pounds sterling.
The company’s renewables segment also delivered a stronger result, with higher energy prices and operational capacity offsetting falling wind speeds across Scotland.
Last October, SSE delivered its first power from Dogger Bank, the world’s largest offshore wind farm under construction, and reached full power at Seagreen, Scotland’s largest wind farm.
Just before that, the Perth-based group secured 605 MW of onshore wind power in the fifth Contracts for Difference auction held in the UK.
More recently, it received confirmation to build Eastern Green Link 2, an undersea transmission cable expected to provide enough electricity to power 2 million homes in the UK.
Alistair Phillips-Davies, chief executive of SSE, commented: ‘Renewables, flexible energy and electricity networks are the pillars of a cleaner, more secure energy system.
“With world-class assets and capabilities and greater visibility into growth in transmission, ESS is ideally positioned to benefit from this structural trend.”
SSE expects to achieve its financial and operational targets by the end of fiscal 2027, including adjusted earnings per share growth of 175 pence to 200 pence.
Additionally, the company maintained its commitment to increase the dividend by 5 to 10 per cent, building on an annual dividend of 60 pence per share last year.
John Moore, senior investment manager at RBC Brewin Dolphin, said: ‘ESS is in a sweet spot in terms of energy transition and policy direction, and the company is making significant investments and becoming an increasingly important part of UK infrastructure.
“At the same time, there is a good balance with shareholder returns, which could make it an attractive option for income-conscious investors.”
ESS actions They fell 2.1 per cent to 1,760.5p on Tuesday morning.
