Britain’s heatwave melts SSE profits
The Big Six energy provider said the warmer weather and soaring gas prices hit earnings by around £80 million in its first quarter.
Energy giant SSE has blamed Britain’s heatwave and soaring wholesale gas prices for an earnings hit of around £80 million.
The Big Six supplier – which is merging its energy and supply business with rival Npower – said households used 10% less gas than expected over the its first quarter to June 30 as temperatures soared.
SSE said it has been 1.5C warmer in the UK over the quarter than the 30-year average.
But SSE said trading has also been hit by poor wind conditions, which have affected its wind farm energy production, as well as “persistently” high gas prices.
It warned that the first quarter knock to underlying earnings could affect its annual results, depending on market conditions for the remainder of its financial year.
There was a further blow as SSE also revealed another steep fall in household accounts as customer switching continues apace, losing another 130,000 accounts since the end of March.
Its total UK and Ireland energy customer accounts stood at 7.45 million as at June 30, down from 7.77 million a year earlier and 7.58 million in March.
The group became the last Big Six provider to hike bills in May, announcing that electricity and gas bills will rise by an average of 6.7%, or £76 per year, in a move affecting 2.36 million customers.
The tariff rise took effect on July 11.
We are very focused on fulfilling our obligations to energy customers and delivering on our key priorities Alistair Phillips-Davies, SSE
SSE chief executive Alistair Phillips-Davies said: “This new financial year has so far been characterised by lower-than-expected output of renewable energy and persistently high gas prices, but, looking ahead, we are very focused on fulfilling our obligations to energy customers and delivering on our key priorities.
“Those priorities include successful delivery of our plans to invest around £1.7 billion in this financial year.”
SSE’s latest earnings woes come after a tough past financial year, when it saw underlying pre-tax profits fall 6% to £1.45 billion, while bottom-line profits tumbled 39% to £1.09 billion.
It lost 430,000 customers and was stung by charges linked to the merger of its retail arm with rival Npower.
In its first-quarter update, SSE said it was still on track to complete the Npower deal by the end of its current financial year to March 31.