SSE defies weather and gas price hikes

Published on 21/07/2010 22:50

UTILITY company Scottish & Southern Energy said it was on course to deliver its dividend targets despite a rise in wholesale gas prices and an "unusual" fall in renewables output due to dry and still weather.

The company, the UK's second-largest supplier of household energy, said output from hydro-electric, wind farms and its biomass plant in the first quarter to end-June fell to 700 Gigawatt hours from 1,000 GWh in the year-earlier period.

It did not give financial guidance for the year, but said it would increase the dividend by at least 2 per cent above RPI.

Ian Marchant, its chief executive, said: "The last few months have been marked by unusually low output of renewable energy and increases in wholesale gas prices. In this challenging environment, we have achieved solid progress, which means we remain on course to deliver our dividend growth target for the year of at least 2 per cent more than inflation."

Analysts currently expect the group to report pretax profit for the year to end-March 2011 of 1.27 billion, just down from 1.29bn for last year.

Since March, SSE said it has commissioned over 80MW of new onshore wind farm capacity, over and above the 1.3bn it has invested in current renewables and gas production projects. SEE also confirmed that preliminary construction work on its section of the Beauly-Denny energy line remained on course to complete during the current financial year.