SSE plc, the Perth-based UK electricity infrastructure giant, said its adjusted profit before tax rose 26.4% to £714.5 million in the six months to September 30 amid a 45% increase in output from its renewables business, as overall revenue fell 7% to around £4.5 billion.
SSE reported: “Value creating investment helping to drive increased contribution from electricity networks and renewables which delivered over 95% of half year adjusted operating profits …
“Balanced business mix provided resilience, as return to favourable weather conditions meant increased SSE Renewables profitability offset lower SSE Thermal contribution …
“Renewables adjusted operating profit increased by 3.9 times on prior period, as combination of 1GW+ increase in operating capacity and return to favourable weather conditions drove ~45% increase in output with long-established hedging approach providing ~30% increase in hedged prices.”
The company’s adjusted “net debt and hybrid capital” rose 10.1% to £9.8 billion.
SSE said interim dividend will rise 6% to 21.2p.
The group said it continued to make progress on the 3.6GW Dogger Bank offshore wind farm which, when complete, will be the world’s largest offshore wind farm. It is a joint venture between SSE Renewables (40%), Equinor (40%) and Vårgrønn (20%).
“With turbine installation ongoing on Dogger Bank A but the winter months fast approaching, completion is expected in the second half of 2025,” said SSE.
“Monopile and transition piece installation on Dogger Bank B continues to make good progress, with procurement of a second turbine installation vessel under way. Despite slower than expected progress on turbine installation, equity returns across all three phases remain comfortably above hurdle rates.”
SSE is the biggest listed company run from Scotland, with a current stock market value of about £19 billion. SSE directly employs about 14,000 staff and supports 56,000 jobs across the UK and Ireland.
CEO Alistair Phillips-Davies said: “This is a strong set of interim results including delivery of higher-quality earnings and the mission-critical infrastructure that shows SSE is at the heart of the clean energy transition.
“We are encouraged by the increasing attractiveness of our main markets and our alignment with the new UK Government’s mission to achieve Clean Power by 2030.
“SSE will be a key delivery partner with our ~£20bn investment programme and the scale and quality of our project pipeline that spans renewables, electricity networks and flexible power plants – which will all be required to make clean power a reality.
“Our unique position gives us exceptional growth opportunities and clear targets that will deliver long-term value to shareholders and society.”
REACTION:
Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “SSE’s powering along nicely and should continue thanks to the foundations built by group CEO Alistair Philips-Davies. But after 11 years in the power seat, he’s announced his intention to step down once a successor is found.
“Turning to business performance, and climate-focused investors will be pleased to hear that renewable energy output rose 45% in the first half. The uplift was helped by increased capacity, higher prices and an easy comparative period as last year’s performance was held back by unfavourable weather conditions.
“Efforts to plant itself at the heart of the clean energy transition have continued at pace, with £1.3bn of investment in the first half. Turbo-charging focus on renewables is a bold and admirable move, but the shift comes with a hefty dose of risk – they’re not always reliable.
“To some degree, they’re always at the mercy of Mother Nature. That’s why more flexible gas-fired plants are still part of the energy mix and can help plug the shortfall in energy output when the wind doesn’t blow in SSE’s favour.
“These assets were loss-making in the first half, but as consumers fire up the heating over winter months, profits are set to warm up over the second half.”