Bloomberg News

SSE Profit Rises as Retail Business Counters Generation Drop

November 14, 2012

SSE Plc (SSE), the U.K.’s second-biggest energy supplier, said first-half profit climbed 38 percent as higher customer gas and power demand countered a decline in sales from electricity generation.

Adjusted pre-tax profit rose to 397.5 million pounds ($631 million) in the six months to Sept. 30 from 287.4 million pounds a year earlier, the Perth, Scotland-based company said today in a statement. That missed the 410.6 million-pound median estimate of five analysts surveyed by Bloomberg.

SSE also benefited from regulated rates for power and gas distribution, even as rising wholesale gas prices eroded revenue from electricity generation. The company raised household gas and power prices in August, while Centrica Plc (CNA)’s British Gas and RWE Npower Plc announced an increase in charges in October.

“Energy market conditions remain challenging,” Chairman Robert Smith said in the statement.  “The prices achieved for generating electricity have been weak, and higher gas and non- energy costs unfortunately had to be reflected in the increase in household energy prices.”

Operating profit for the utility’s wholesale business dropped 45 percent to 123.2 million pounds, while operating profit for its retail business was 75.7 million pounds compared to a loss of 101.4 million pounds a year ago.

SSE plans an interim dividend of 25.2 pence a share, compared with 24 pence in the previous year. The utility has paid shareholders an above-inflation dividend every year for the past 12 and is committed to paying out at least 2 percent more than inflation this fiscal year. The company expects the full- year dividend to be around 84 pence.

To contact the reporter responsible for this story: Sally Bakewell in London at Sbakewell1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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