SSE Announces Preliminary Results to 30 September 2014
OREANDA-NEWS. SSE plc has today announced its preliminary results for the six months to 30 September 2014 during which adjusted profit before tax rose by 4.6% to £370.3m.
This follows significant investment in the electricity network and the benefits of its value programme announced on 26 March 2014.
Alistair Phillips-Davies, Chief Executive, said: "In tough market conditions we have been able to deliver solid business results at the same time as being a responsible company that does the right thing by its employees and its customers".
"Successful energy companies are needed to invest in the UK and Ireland and we are contributing around £9 billion a year to the wider UK economy, but we think it's also important to take a stand on issues for our customers and employees by committing to things like the Living Wage, the Fair Tax Mark and our own price freeze."
SSE reports in three 'segments', reflecting its business structure.
Operating profit in the Wholesale business decreased by 83.4% to £26.7m with lower electricity output due to mild weather, as well as lower profitability in gas production.
The economically-regulated Networks business posted an increase in operating profit of 4.7% to £458.4m, reflecting the continuing major investment in the infrastructure, pipes and wires used to transmit and distribute energy to homes and businesses across Great Britain.
The company has reported an operating loss of £16.9m in its Energy Supply business, the division that sells energy to customers. This reflects extremely competitive energy market conditions and a sustained period of unusually warm weather.
Energy Supply, Energy-related Services (boiler, central heating maintenance and installation) and Enterprise (contracting, telecoms, lighting and utilities), combine to form SSE's Retail group which supports both domestic and business customers. It reported an overall operating profit of £37.3m, compared to an operating loss of £71.4m in the same period last year. This follows SSE's value and simplification programme announced in March.
SSE also reported a total capital expenditure and investment of £679.3m, exclusively in Great Britain and Ireland, building the type of power generation assets and electricity networks required to ensure customers have secure and affordable energy supplies in future years. This has seen electricity generated for the first time at SSE's new CCGT development at Great Island in the South-East of Ireland, SSE's subsidiary Scottish Hydro Electric Transmission laying all of the foundations and wiring 85% of its section of the Beauly-Denny replacement line, and a programme in the Retail business to introduce new systems which will deliver enhanced services to customers and support the installation of smart meters in the years to 2020.
SSE's capital investment and expenditure for 2014/15 is now forecast to total just under £1.6bn (gross) for the year and to total around £5.5bn (net of asset and business disposals) in the four years to and including 2017/18.
Recognising this investment in UK and Ireland infrastructure and the impact on the economy, an independent report by PwC found that SSE has delivered a £26.33bn contribution to the economy in the last three years and supported on average 112,000 jobs each year.
Since its full year results, SSE has become the first FTSE 100 company to be accredited with the Fair Tax Mark.
SSE also today announces that its Chairman, Lord Smith of Kelvin, will step down from the Board on 1 January 2016 after 13 years' service. Richard Gillingwater CBE will be appointed Deputy Chairman of SSE plc on 1 January 2015. Subject to being re-elected to the Board at the Annual General Meeting in July 2015, he will be appointed Chairman in succession to Lord Smith of Kelvin.
SSE has completed the sale, to Equitix Infrastructure 3 Limited (Equitix), of its 100% equity interest in the special purpose entities (SPEs) established in England under the Private Finance Initiative (PFI), for the delivery of seven street lighting projects. The SPEs are funded through a mix of senior debt and equity, and the removal of this project-related senior debt, along with the cash consideration of £97.5m, will have the immediate effect of reducing SSE's net debt by £326.4m.
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