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SSE pre-tax profits rose 9.6 per cent to £1.55 billion in 2013 as investment in gas production and major network upgrades paid off, it announced on Wednesday.
The strong network and upstream performance outweighed a 28.6 per cent drop in retail profits, hit by weak demand over a mild winter.
The energy company said its promise to freeze prices until January 2016 would cut profits by an estimated £100 million over that period.
Alistair Phillips-Davies, chief executive of SSE, said: “We introduced our price freeze right at the end of the last financial year and it has been hugely popular. It remains the only such commitment available to all customers and will mean we take a hit on retail profits over the next couple of years.”
To keep bills down in the long run, the company reiterated calls for government to fund environmental and social levies through taxation.
Operating profits in the wholesale business increased by 24.8 per cent to £634.6 million, boosted by £90 million from SSE’s newly acquired Sean gas field. Leaving out the revenue from Sean, profits were flat. In the regulated networks business, profits rose 9.3 per cent to £955.4 million.
SSE emphasised its investments of £1.58 billion exceeded profits. Lord Smith of Kelvin, chairman of SSE, said: “We have well-defined plans to invest over £5.5bn in the next four years in maintaining, upgrading and building the electricity assets customers depend on; and we are committed to giving investors a fair return through an annual dividend that keeps pace with inflation.”
The four-year plan also targets asset sales of £1 billion, half of which capital is to be recycled to invest in further renewables projects.
Commenting on a proposed energy market referral to the Competition and Markets Authority, SSE said the investigation must be broad enough in scope to restore trust in the competitive markets. It should also establish clear measures of success, so customers can see if the market is working, the company said.
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