SSE plc, the Perth-based renewable energy and power networks giant, said on Tuesday it is committed to reinvesting “any additional profits derived from market variability” directly back into energy infrastructure that “will prevent a repeat of the crisis in the long-term.”
SSE is the largest listed company run from Scotland.
In a market update to announce its closed period, SSE said: “Since SSE’s Q1 Trading Statement, good performance from gas storage and flexible thermal has continued in volatile market conditions, demonstrating their value to the energy system.
“At the same time, lower-than-expected output, mainly due to weather, means total renewable output for the year to 22 September was around 13% below plan.
“In light of this SSE expects to report half year 2022/23 adjusted earnings per share of at least 40 pence.
“However, as performance over any six-month period can be variable, SSE focuses on results for the financial year as a whole and manages its businesses accordingly.”
SSE shares fell about 4% to around £16.07 to give the firm a current stock market value of about £17 billion.
In a full year financial outlook, SSE said: “SSE’s balanced portfolio of assets of electricity networks, renewables and flexible generation and storage mean that the company is performing well in volatile market conditions.
“However, risks remain given continuing market uncertainty and liquidity, a fast-moving policy environment, weather variability, plant availability and the complexity and scale of large capital projects in which SSE is engaged.
“As always, SSE will seek to manage these risks carefully through the winter period.
“Despite the current highly changeable market environment, and the resultant wide range of potential financial outcomes from volatile future commodity prices, SSE’s original full-year guidance of adjusted earnings per share of at least 120 pence remains unchanged.
“SSE expects to provide updated guidance on full-year adjusted earnings per share later in the year, as the winter period progresses.
“SSE has been clear that any additional profit it may generate, subject to the risks outlined above, will be reinvested in projects that will provide long-term solutions that help reduce the UK’s exposure to volatile international gas prices.
“The company remains on course to report record 2022/23 capex in excess of £2.5bn (including acquisitions) and expects leverage to be lower than the target 4.5 times net debt to EBITDA ratio.”
SSE Finance Director Gregor Alexander said: “Our balanced business mix has ensured a strong performance to date, however in such highly volatile market conditions, financial performance for the full year will be significantly influenced by plant availability, weather and commodity price movements.
“SSE continues to deliver growth through its fully-funded £12.5bn Net Zero Acceleration Programme that will benefit society in the long term.
“Our plans include a growth enabling, rebased dividend from 2023/24 onwards and SSE’s net investment into vital UK and Ireland infrastructure could exceed £25bn this decade, creating thousands of jobs and ensuring secure, affordable, low carbon energy systems.
“As an infrastructure company SSE’s over-riding response to the European energy crisis is to address the root cause of the problem and we are committed to reinvesting any additional profits derived from market variability directly back into energy infrastructure that will prevent a repeat of the crisis in the long-term.”