SSE warns of ‘disappointing’ trading after warm weather

SSE has warned that its performance in the first five months of the financial year was “disappointing” and “regrettable”.

The energy company said operating profits for the period would be £190m lower than expected.

This was because of “relatively dry, still and warm weather” which affected output from its wind farms and hydro-electric stations.

It also cited “persistently high gas prices”.

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.”

Half-year profits halved

The statement 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 latest update, SSE also provided details of its profits expectations for the first six months of the financial year, which runs to the end of September. It said adjusted operating profit for the period would be half that of the same period a year ago.

Its wholesale business is expected to report an operating loss.

It also said that the cap being proposed by energy regulator Ofgem on default tariffs would also lead to “significantly lower” profits than it had expected at the start of the financial year. Earlier this month, Ofgem proposed an energy bill price cap of £1,136 a year for “typical usage” by the end of the year.

The retail arm of the company is in the process of merging with Npower, another of the UK’s “big six” energy suppliers.

Mr Phillips-Davies said: “Reshaping and renewing the SSE group will support the delivery of our five-year dividend plan in the years ahead.”