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SSE has reported its highest energy supply profit margins in two years despite losing almost 500,000 retail customers.
The UK’s second largest utility said in its preliminary full-year results that its profit margin for the year 2014/15 was 4.6 per cent, compared with 2.9 per cent in 2013/14 and 4.2 per cent in 2012/13.
It’s £368.7 million profit for the energy supply arm was in line with 2012/13 levels, but stands 50 per cent higher year on year from £246 million.
However the company expects lower profits form this part of its business in 2015/16 as customer numbers continue to fall. In its latest report SSE says its customer numbers have fallen to almost 8.58 million from 9.10 million over the course of the year, suggesting an acceleration of losses in recent months as SSE had lost 390,000 at end January.
The stronger supply performance for the most recent year helped to offset lower wholesale profits which fell to £473.8 million, down over 25 per cent, due to “tough market conditions” and lower output.
The utility’s overall adjusted profit before tax was able to hold relatively, rising by 0.9 per cent to £1.56 billion.
Market conditions across Europe have taken a toll on utilities as regulation acts to shift generators away from traditional fossil fuel use to cleaner, low carbon options which are often subsidised. As a result SSE has said it will ‘reshape’ its portfolio towards renewables and gas, and today confirmed it will shut down its Ferrybridge coal-fired power plant in March next year.
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