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SSE profits hit by energy prices, but still beats expectations

The group is one of the so-called 'big six' energy firms and the UK's second largest.

A gas flame
Operating profit at its wholesale gas division fell 94% to just £2.2mln, reflecting the lower average achieved price for gas produced, the firm said.

UK energy giant SSE (LON:SSE) reported a 19% drop in pre-tax profits last year as operations were hit by lower wholesale gas prices, increased competition and falling customers.

The unadjusted pre-tax profit for the year to March 31 was £593mln compared to £735mln in the previous year.

Nevertheless adjusted earnings per share, which does not include exceptional items, was down  3.7% to 119.5p but still ahead of the utility's target of at least 115p and better than analysts' expectations.

The group also noted it has also met its main aim of an annual increase in the full-year dividend, which was at least equal to RPI (retail price index) inflation and the board has recommended  a full-year dividend up 1.1% to 89.4p.

Operating profit at its wholesale gas division fell 94% to just £2.2mln, reflecting the lower average achieved price  for gas produced, the firm said.

The group, which is one of the so-called 'big six' energy firms, and the UK's second largest, has faced increased competition and falling numbers of customers and lost 300,000 households and businesses in the year.

In January it unveiled a 5.3% cut to standard gas prices starting at the end of March  but critics said it was too little, too late. The price cut followed in the footsteps of rival E.On, which also slashed prices by 5.1%.

Notably, Wednesday's statement also revealed that SSE was mulling selling up to a third of its 50% stake in gas distribution firm SGN to raise cash for shareholders or to reinvest.

Shares rose 0.32% to 1,552p.

Quick facts: SSE PLC

Price: 1341 GBX

LSE:SSE
Market: LSE
Market Cap: £13.94 billion
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