Energy giant SSE to reveal pandemic hit
The Perth-headquartered group has warned that it expects a £120-130 million hit to operating profits from Covid-19 in the six months to September 30 as electricity demand across the economy fell sharply.
SSE has previously forecast that the full-year impact on operating profits would be in the range of £150m to £250m before mitigation measures, although that was before the UK and Scottish governments announced further lockdown measures.
The group has also been impacted by lower output from its renewable generation portfolio, mainly due to unfavourable weather conditions. In the year to September 21 output was some 9 per cent below plan.
The group has said it plans to offset some of the impact of the pandemic by reducing capital expenditure budgets with at least £250m expected to be cut this year alongside some £2 billion from disposals by the autumn of 2021.
However, it is pressing ahead with plans to invest in the UK’s green economic recovery, with £7.5bn of capital expenditure in low-carbon projects, primarily in renewables and electricity networks.
Alongside this week’s figures, SSE is also expected to provide further guidance on its dividend plans. It recently said it continues to expect to recommend a full-year dividend of 80p a share plus RPI inflation. In line with that, an interim dividend for 2020/21 of 24.4 pence is expected to be paid to shareholders in March 2021.
In an update at the end of September ahead of the results, finance director Gregor Alexander said the group was continuing to “perform well operationally”.
He said: “The underlying strength of our business model and our strategic focus on the transition to a net-zero economy stand us in good stead for the future.”
Earlier this year, SSE completed the sale of its household energy supply business to Ovo, although it is still a major supplier to business customers.
Last week, National Grid reported underlying operating profit for the first half fell 12 per cent to £1.1bn, primarily reflecting the impact of Covid-19 related costs.
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