UK Utility SSE Issues Profit Warning

Britain’s second largest electric and gas utility SSE has warned it will not miss its 2018/19 profits target.

In a trading statement September 12, it said high UK wholesale gas prices, and dry still warm weather over the summer – reducing its hydro- and wind power generation – meant that SSE's adjusted operating profit from April to August 2018, the first five months of its financial year, are some £190mn ($247mn) below its plan.

Most of the lower than targeted earnings are from Energy Portfolio Management (wholesale and trading) and generation, but SSE expects a profit from upstream gas production, and breakeven from its retail.

“At this stage, Energy Portfolio Management is currently expected to incur an adjusted operating loss in excess of £300mn for the financial year as a whole,” SSE stated.

CEO Alistair Phillips-Davies called SSE's financial performance in the first five months “disappointing and regrettable.”  Two months ago SSE said adjusted profit for April-June was some £80mn below plan.

Banner photo: SSE's HQ in Perth, Scotland (Credit: the company)