Scottish electricity and gas giant SSE has warned of increased risks to investment and how it serves customers if the UK’s European Union referendum vote triggers protracted uncertainty over the regulatory environment.

The company sounded the warning as it announced that full year earnings would fall because of a reduction in energy supply customer numbers and reduced profits in its enterprise division.

SSE also highlighted “challenging” trading conditions, citing the fall in commodity prices, increased competition and the Competition and Markets Authority (CMA)’s proposals to reform the energy market.

While SSE refused to back either side in the Brexit debate, saying it was a matter for voters, it said that political and regulatory change remained one of its principal risks and “prolonged uncertainty following the EU referendum would add to that risk.”

The company added that regardless of the outcome it agreed with the UK Government that collaboration with other European countries on energy matters brings benefits to UK consumers.

“Energy is a shared competence and while member states can determine how they best use their energy resources, participation in the [EU] internal energy market has been beneficial to UK customers and assisted efforts to achieve secure, affordable and low-carbon energy,” said the company in a statement.

SSE recognised however that it is possible to participate in the internal energy market while not being a member of the free trade bloc.

Ahead of the May 18 publication of its financial results for the year to March 31, SSE reported that earnings per share will fall to between 117p and 119p compared to last year’s 124.1p, representing of a drop of between 5.7 and 4.1 per cent.

“In view of the wider energy sector conditions, SSE continues to recognise that adjusted earnings per share is subject to significant uncertainties,” said the company.

Despite this, SSE has pledged to increase its dividend by at least one percent, in line with retail prices index inflation. It suggested that its dividend cover could range from around 1.2 times to around 1.4 times over the three years to 2017/18.

Last year’s 88.4 pence dividend was up two per cent and covered 1.4 times by adjusted earnings per share.

All three of the company’s segments are expected to be profitable though retail operating profit is expected to decrease from last year’s £456.8 million, mainly because of a reduction in energy supply customer numbers and lower profits in its enterprise division – which provides a range of energy related services.

At the time of last year’s report, SSE had 8.58 million energy supply customers. This number had fallen to 8.28 million by November and is expected to have dropped further.

Wholesale operating profit is expected to be broadly in line with last year’s £473.8m and the networks division’s operating profit is expected to increase slightly from last year’s £936.8m.

Last year the company’s overall pre-tax profits stood at £1.56bn.

SSE expects that its adjusted net debt and hybrid capital will be around £8.5bn, compared with £7.9bn at the end of September 2015. This comes following the October acquisition from Total E&P UK of a 20 per cent interest in the four gas fields and surrounding exploration acreage collectively known as the Greater Laggan area. Unfavourable movements in foreign exchange rates have also been a factor.

Gregor Alexander, finance director of SSE, said SSE continued to fulfil its core purpose of providing energy in a reliable and sustainable way. “Our focus is on operational efficiency, disciplined investment and maintaining a balanced range of businesses,” he said.

Mr Alexander said the CMA proposals to reform the energy market represented a substantial and in places challenging package of measures.

“Nevertheless, completion of the CMA investigation and the UK government’s consultation on the future of the electricity capacity market imply progress towards a more settled regulatory and policy framework,” he said. “This suggests a more encouraging environment in which to head into the new financial year, and SSE will continue to be focused on delivering for both its customers and shareholders.”