SSE Scottish Hydro has said the contribution from its first-half profits to its overall annual results will be much lower than usual but it signalled that the full-year remains on track.
While the Perth-based firm’s first-half adjusted operating profit is typically around 35 per cent of the full year total, the first-half proportion in 2019/20 is likely to be around 20% of the full year total.
The company said this was due to most of its expected losses happening in the first six months and because of the ongoing suspension of the capacity market, a scheme paying billions of pounds to UK utilities to provide back-up electricity, which has hit all energy suppliers.
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Its energy portfolio management loss was announced last year when firm said then it would filter through to this year’s results, and so was expected by the market.
The firm said its focus is on results for the full financial year and the overall outlook described in May and July for adjusted operating profit across a number of SSE’s business units remains “largely unchanged”.
The outlook included adjusted operating profit expected to be around £25 million lower than first forecast, at around £375m, with lower than expected distribution use of system electricity volumes and a greater number of network faults cited.
However, it added that recent favourable weather conditions mean that output of renewable energy as at mid-September 2019 is in line with the forecast annual total for the year, compared with the shortfall of around 4% in June 2019.
SSE said it currently expects its adjusted earnings to total around £931m.
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This is within the range of analysts’ forecasts and, in line with the outlook for the year given in May, it assumes the receipt of the suspended capacity market payments totalling £148m and normal weather conditions in the last seven months of the financial year.
Gregor Alexander, finance director, said: "The key months of our financial year are still to come, and working to mitigate the economic, regulatory and political uncertainties arising from the Brexit process will continue to be a key priority for SSE.
"Despite this uncertain backdrop, we are fully committed to recommending a full-year dividend of 80p as part of our five-year dividend plan to March 2023, supported by a recovery in adjusted earnings per share for the full-year and underpinned by a commitment to strong operational performance in the interests of energy customers across the UK and Ireland."
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