Rising costs hit SSE retail arm
One of Britain's biggest energy companies has revealed it made a loss on its retail operations over the summer after wholesale gas prices rose.
SSE, which trades as Southern Electric, Swalec and Scottish Hydro, also blamed rising fixed distribution costs for the shortfall in the six months to September 30, a period when energy consumption is much lower.
The company last increased tariffs in October 2012 but warned earlier this spring that more could be in the pipeline because it was facing additional costs of more than £80 per dual fuel customer in the 2013/14 financial year.
Amid speculation that rival Centrica is poised to announce a rise in tariffs, SSE provided no commentary in today's update on the outlook for household bills.
Shares in SSE and other utility companies fell sharply last week after Labour leader Ed Miliband's pledge to freeze energy prices if he came into power.
SSE's retail division made a half-year profit of £75.7 million in 2012, compared with a loss of £101.4 million a year earlier. It contributed around 13% to the overall company's results, with the rest coming from its energy networks and generation capacity.
Group profits for the six months are expected to be lower than last year, although this should have no implications for the full-year performance.
The company also stuck by its pledge to increase its dividend to investors by more than RPI inflation. The promise of a healthy dividend is vital to ensure it is able to raise enough money to fund spending on its network.
SSE, which has around 10 million customer accounts and is the UK's second largest generator of electricity, is one of just five mainstays of the FTSE 100 Index to have delivered better-than-inflation dividend growth every year since 1999.
Finance director Gregor Alexander said: "Despite the intensifying political debate, we will maintain our operational and financial discipline, to enable us to deliver an above-inflation increase in the dividend for this financial year and beyond."