SSE sees pre-tax profits plunge by more than 40%

SSE has announced a fall in adjusted pre-tax profits of more than 40 per cent in its latest set of financial figures.

The company posted its interim results today (14 November) for the six months to 30 September, which include a 40.9 per cent fall in underlying pre-tax profits to £246.4 million.

The firm also posted a reported pre-tax loss of £265.3 million for the same time period.

SSE has also announced that it plans to consolidate the development, operation and ownership of all of its renewable energy assets in the UK and Ireland under a single entity, called SSE Renewables.

The results also show SSE expects that its household energy supply business will report an adjusted operating profit margin of between 2 per cent and 3 per cent for the year ended 31 March 2019, compared to 6.8 per cent in the previous financial year, because of “competitive pressures” and the impact of the government’s energy price cap.

Earlier this month, it was revealed that the merger between npower and SSE’s retail arm due was being delayed because of “adverse developments in the UK market”.

Last month the Competition and Markets Authority’s (CMA) gave the green light to the proposed merger between the two companies.

The decision came after provisional clearance was given by the inquiry group of independent CMA panel members at the end of August.

“Although our half-year results are slightly ahead of the position we set out in September, they fall well short of what we hoped to achieve at the start of the year,” said SSE chairman, Richard Gillingwater.

“This is disappointing and regrettable, but important changes are now being made to the way SSE manages its exposure to energy commodities,” added the chairman.

“The commercial terms of the proposed combination of SSE Energy Services and Npower are the subject of ongoing discussions, and creating a new independent energy supplier remains our objective.

“The board believes that the best future for SSE Energy Services, including its customers and employees, lies outside the SSE group.”

Peter Earl, head of energy at the comparethemarket.com, commented: “SSE has been one of the hardest hit by the switching revolution, with customers leaving its standard variable tariff in droves, to better value fixed tariffs.

“In recent months, it has seen an increase in customer departures via our website, with more than one in 10 switching households choosing to leave SSE.”