SSE sheds 50,000 customers

SSE shed 50,000 retail customers in the three months up to the end of June.

Despite the loses the company made a “solid start” to the financial year, its chief executive said in a first quarter trading update.

The number of retail customers fell from 8.21 million at the end of March to 8.16 million. At the same time the number of home service customers grew from 400,000 to 416,000. The company has installed more than 250,000 smart meters so far.

Renewable generation over the quarter was 1.51TWh, down from 2.2TWh during the same period last year, due to “differences in weather between the two periods”.

The company generated 4.40TWh of power from gas and oil-fired power stations, up from 2.42TWh. No power was generated at all at Fiddler’s Ferry –  the company’s only coal-fired power plant since Ferrybridge was closed in March. Its coal-fired plants generated 0.41TWh of electricity in the same three months in 2015.

The start of production at the Laggan-Tomore gas fields near the Shetlands in February pushed up total gas output from 115 to 158 million therms.

SSE chief executive Alistair Phillips-Davies said: “SSE has made a solid start to the financial year with continued focus on operational efficiency, putting our customers at the heart of everything we do and progressing long-term investments in the UK’s and Ireland’s energy infrastructure, including significant progress with the Beatrice Offshore Wind Farm and the new Caithness-Moray electricity transmission link.”

Analysts at investment firm Jefferies said: “Customer losses continued in Q1, with a reduction of 0.6 per cent to 8.16 million. While customer losses have continued, the rate of loss over Q1 appears to be slower than that in 2015/16 where SSE customer numbers fell 4 per cent. With competition in the retail market remaining high, the outlook for SSE’s retail business remains challenging.”

SSE said it expects to cut its debts by around £138 million by selling of its shares in three street lighting ventures. A deal has already been agreed, although the exact amounts will not be finalised until the completion of the sales. That is expected to happen at some point during the current financial year. It will be the final stage in a two-year programme of selling off £1.1 billion of “assets not core to its future plans”.

A process “is now under way” for the sale of a third of SSE’s 50 per cent stake in gas networks firm SGN. However, a final decision on whether or not to proceed with the sale has not yet been made. The sale could be expected to bring in around £1 billion, the analysts at Jefferies said. 

On the topic of Brexit, SSE said “political and regulatory issues and uncertainties” have long been factored into its decision making and it will continue to “monitor and manage any impact on its businesses” following the vote. It said it was optimistic about cooperation between the UK, Irish and EU governments and it would make the case to them for “stability, market harmonisation and effective carbon pricing”.

On the Competition and Markets Authority’s final remedies it said: “Overall SSE recognises that the CMA has set the direction of travel in [Britain’s] energy supply market and the onus is now on suppliers to work with the regulator and other stakeholders to deliver a package of reforms that are in the interests of customers.”