PERTH-based electricity and gas company SSE ground out a 2% rise in adjusted pre-tax profit to £1.3bn in its last financial year as high rainfall in Scotland helped it to a record year of output from its hydroelectric schemes.
SSE, previously known as Scottish & Southern Energy, highlighted tough conditions including energy market upheaval, economic uncertainty and poor weather.
Chairman Lord Robert Smith said: "Higher wholesale gas prices, falling demand for energy and a succession of winter storms presented major challenges for the wholesale, retail and networks parts of SSE."
But the City was split on SSE's performance. Investec analyst Angelos Anastasiou said: "These are not great figures, even if they are much as expected.
"SSE needs to show concrete signs of improvement from its extensive investment programme this year, otherwise the market may well lose patience."
Analysts Merrill Lynch tipped the company to see flat earnings in the current year.
But analysts at Credit Suisse said they anticipated a 5.0% rise in profits as it brings on stream more renewable energy schemes.
SSE's shares rose 10p or 0.75% to 1335p.
Operating profit at SSE's retail business fell 19.7% to £321.6 million in the year to March 2012 as energy customer accounts dropped by 100,000 during last year to 9.6 million.
As the economy toiled, average gas use was down 19.9%, while electricity consumption dropped 6.9%. But green energy helped boost operating profit at its wholesale business unit – which oversees the production, storage and generation of energy – by 6.4%.
It was helped by a 73% rise in generation from wind and hydro schemes. Output from its hydro stations increased from 2558 gigawatt hours in 2010/11 to 4262 gigawatt hours in 2011/12, 9% ahead of its previous record year.
SSE chief executive Ian Marchant told The Herald: "It was all [down to] weather. It was the wettest in Scotland for the past 50 years."
Its hydroelectric output will be boosted further as SSE remains on track to restart generation at its troubled Glendoe plant this summer. Glendoe was Scotland's first major hydroelectric scheme since the 1950s but closed in 2009, just months after opening when a rockfall blocked a tunnel.
Mr Marchant said: "We expect to start filling the reservoirs for the next few weeks and it will depend on rainfall when we start [generation]."
The legal battle over who will pay for it continues.
"These things can take years," Mr Marchant said. "We are not expecting to resolve it this financial year."
SSE said the rise in wholesale gas prices hurt spark spreads – the difference between the cost of gas and the price of electricity produced from it – which averaged less than £1 per megawatt hour over the year.
While Centrica last week said higher wholesale prices means the trend for retail prices is "upward", Mr Marchant was more circumspect.
He said that SSE is holding to its pledge not to increase customer bills until at least October.
"What is the outlook towards the end of the year? I hope we do not have to do anything. The wholesale price is weakening," he added.
SSE met its pledge of increasing its dividend by two percentage points above retail prices index inflation by announcing a final dividend of 56.1p, up 6.7% on the 52.6p paid the previous year. This will make a full-year pay-out of 80.1p, up 6.8% on 2011.
Meanwhile, the company published its remuneration report that showed Mr Marchant's pay was down from £1.4m in 2011 to £1.2m in 2012. This included a cash incentive of £158,000 and £170,000 from the payout of an award made in 2009.
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