SSE plc, the Perth-based electricity infrastructure giant, said on Wednesday it invested almost four times as much as it made in profits in the first half of its financial year to September 30.
The Perth firm is one of the leading generators of renewable energy and one of the largest operators of electricity networks in Great Britain.
According to its interim results, SSE invested a record £1.7 billion compared to adjusted profit after tax of £489 million in the six months.
SSE posted first-half revenue of £5.63 billion, up 59% from £3.54 billion.
“The group’s financial results benefited from a good performance from the Thermal Energy business, which includes flexible gas-fired power stations and gas storage facilities,” said the company.
“SSE has approximately 40% of the UK’s onshore underground gas storage capacity which has proven its value to the system providing vital security of supply and flexibility in more volatile market conditions after a number of years of weaker returns.
“Performance was also strong in the group’s Regulated Networks businesses, which continue to connect new generation assets to the grid, securing power to people’s homes.”
SSE posted adjusted pre-tax profit for the half year of £559.4 million, more than treble the £174.2 million posted last year.
The company posted a reported pre-tax loss of £511.0 million for the six months, versus a profit of £1.69 billion a year prior. This came as its cost of sales rocketed to £6.13 billion from £1.19 billion the previous year.
“Reported results include the impact of accounting rules (IFRS 9) on the group’s forward purchase contracts, or hedges, which does not reflect the realised operating performance of the business,” said SSE.
“SSE therefore provides adjusted results to give a more accurate picture of underlying performance.
“First half earnings per share were in line with September’s pre-close guidance at 41.8p. The board has recommended an interim dividend of 29.0p, in line with policy and payable on the 9 March 2023.
“SSE continues to expect adjusted earnings per share for the full year of at least 120p – unchanged from May – with capital expenditure for the full year expected to be in excess of a record £2.5bn, including acquisitions …
“SSE has also continued to increase its workforce across the UK, consistent with its plan of adding at least 1,000 new roles per year to 2025.
“In the past 12 months alone, the company has hired an additional 1,200 posts including a record number of apprentices and graduates.
“Across the UK, the group’s operations and investment programme supports more than 40,000 jobs, many of which are outside larger urban centres, helping support communities across the country.”
SSE CEO Alistair Phillips-Davies said: “One year on and despite unprecedented volatility in the operating environment, our Net Zero Acceleration Programme has never been more relevant to society.
“We are investing around £12.5bn in the five years to March 2026, with further opportunities that could take the total to over £25bn this decade in the UK and Ireland alone.
“This direct investment primarily in offshore wind, UK electricity networks and flexible thermal will create the technologies to support long-term energy security.
“Over the past six months we have been delivering on our domestic investment programme at pace whilst increasing our pipeline diversity, through exporting our renewables expertise into selected markets overseas where net zero ambitions have also increased.
“This has been complemented by our Triton acquisition and organic growth potential in networks as they keep pace with increasingly ambitious government policy.
“The strength and optionality of our resilient mix of market-based and regulated businesses have shone through in this period, with recent trading conditions highlighting the true value to society of a portfolio that balances intermittent renewables with flexible generation when the system needs it most.
“Our business model and strategy are delivering for our stakeholders today, whilst creating future long-term societal value.”
UK finance minister Jeremy Hunt is reportedly planning to extend windfall taxes on Thursday to cover electricity generators as he seeks to plug a massive hole in UK government finances.
“If they (new taxes) are fair and reasonable, fine,” Phillips-Davies told reporters.
“I think one of the things we have got to be careful in the UK is that we have created an amazing environment for investors … its critical we don’t endanger that …
“”We will have to stand back and look at what comes out tomorrow and carefully consider that.”