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Energy firm SSE has warned that a vote for the UK to exit the European Union would increase the risk in its business if there is a prolonged period of legislative or regulatory uncertainty.
In its pre-close update published today, the energy firm said the result of the EU referendum presents “no immediate risk” to how SSE serves its customers or to the investment that it continues to make in order to fulfil its core purpose.
But it said the level of risk may increase if, following the referendum, there is a “prolonged period of uncertainty” about the legislative or regulatory framework that SSE operates within.
SSE said it will not, however, take a view on whether the UK should remain or leave.
Also in its statement, SSE said it expects wholesale operating profit to be broadly in line with last year, with an increase in renewable generation offset by a reduction in gas production profits to around breakeven, which it said reflects the “challenging market conditions”.
The firm expects networks operating profit to increase slightly, with continued growth in transmission offset by the expected reduction in base revenues under the first year of the RIIO-ED1 price control and a slight reduction in SGN profits.
Retail operating profit is expected be down, mainly due to a reduction in energy supply customer numbers and lower enterprise profits.
SSE finance director Gregor Alexander said: “The operating environment remains challenging, due to factors including falling commodity prices and increased retail market competition, and the Competition and Markets Authority’s provisional decision on remedies represents a substantial and in places challenging package.
“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 within [Great Britain].
“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.”
SSE will publish its preliminary results for 2015/16 on 18 May 2016. Its Annual General Meeting will take place on 21 July 2016.
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