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Tuesday, September 25, 2018

SSE trading 'regrettable' after heatwave halves profits

It blamed "relatively dry, still and warm weather" - lowering output from its wind farms and hydro-electric stations - and "persistently high gas prices".

As a result, profits for the six-month period, would be "around half" that of a year earlier, it said.

The shares fell 8% to £11.50.

SSE trading 'regrettable' after heatwave halves profits

Alistair Phillips-Davies, SSE's chief executive, said: "Lower than expected output of renewable energy and higher than expected gas prices mean that SSE's financial performance in the first five months has been disappointing and regrettable."

The trading update follows its announcement in July that first-quarter profits would be £80m lower than expected after the recent hot weather affected its wind turbines.

In the statement on Wednesday, it said profits for the five months so far would be £190m lower than expected. This meant six month profits, for the year to the end of September, would be around half of that in the same period a year ago.

SSE also said its retail arm would be affected by the cap being proposed by energy regulator Ofgem on default tariffs. Earlier this month, Ofgem proposed an energy bill price cap of £1,136 a year for "typical usage" by the end of the year.

SSE said this would lead to "significantly lower" profits than it had expected at the start of the financial year in its retail arm and pointed out that unlike other energy suppliers it had only raised prices once this year.

 

Read the full story at The BBC.