SSE reports 4% profit drop to £2.4 billion

SSE has reported a 4% drop in adjusted operating profit to £2.4bn for the year.

The electricity infrastructure group's 2023/24 financial and operational performance statement also revealed adjusted earnings per share of 158.5p, down 5%, but towards the top end of guidance.

The fall in profit reflected lower volatility and energy prices that impacted the performance of its thermal and gas storage business.

This was partially offset by higher renewables volumes, as the business benefited from capacity additions, including its Seagreen offshore wind farm reaching full operations.

In electricity networks, transmission benefited from an increase in allowed revenues, as it ramped up investment, while distribution was impacted by the timing of the recovery of inflationary cost increases.

The Perth-based group invested around £2.5bn in delivering critical energy infrastructure, including the delivery of first power at Dogger Bank - the world’s largest wind farm - final commissioning on both the Viking onshore wind farm and Shetland subsea transmission link, as well as beginning to build the circa 500km Eastern Green Link 2 subsea transmission cable.

SSE supports around 56,000 direct and indirect jobs across the UK and Ireland, which it estimates adds £6.9bn to UK and Irish GDP.

Chief executive Alistair Phillips-Davies said: “This is a strong performance where we have delivered essential energy infrastructure, benefited from the resilience of our business model, and made disciplined investment in our excellent growth opportunities.

“Renewables, flexible power and electricity networks are the building blocks of a cleaner and more secure energy system.

“With world-class assets and capabilities, and enhanced visibility of growth in transmission, SSE is ideally placed to benefit from this structural trend, creating value for shareholders and society.

“Our immediate focus is on delivering our financial and operational growth targets out to 2026/27 and we are on track to do this, converting our premium organic project pipeline into high-quality sustainable earnings,“ he continued, adding: “More broadly we continue to see a path to investing circa £40bn this decade assuming a supportive policy environment, helping speed up the clean energy transition and creating and supporting thousands more good jobs in the process.”

John Moore, senior investment manager at RBC Brewin Dolphin, commented: “Unfavourable weather has had a temporary impact and the company still managed to deliver towards the upper end of previous guidance.

“SSE is in a sweet spot in terms of the energy transition and the direction of policy, and the company is making significant investments and becoming an increasingly important part of the UK’s infrastructure.

“At the same time, there is a good balance with shareholder returns, which could make it an attractive option for income-minded investors.”

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