SSE takes Covid profit hit amid green energy push
Energy giant SSE today said that profit before tax had fallen a quarter in the first half of the year due to the coronavirus pandemic.
The FTSE 100 company said that the pandemic had cost it £115m over the last six months, with full year costs between £150m and £250m forecast.
Adjusted profit before tax fell 26 per cent to £193.9m over the period, SSE said, while earnings per share fell 34 per cent to 11.9p.
At the beginning of the year, the firm sold its household energy business to challenger brand Ovo in order to focus instead on the production of green energy.
Today it announced plans to treble its renewable power capacity by 2030, with plans to add 1 gigawatt of power a year every year from 2025 onwards.
SSE is already in the process of investing £7.5bn in low-carbon projects, including massive new wind farms off Scotland and in the North Sea.
It has also delivered £1.4bn of a £2bn disposal plan by selling a number of assets in recent months.
Commenting on the results, Donald Brown, senior investment manager at Brewin Dolphin, said: “The £115 million profit hit from Covid-19 aside, SSE has made significant progress in re-shaping its business – the sale of SSE Energy Services as well as the more recent disposals of stakes in Ferrybridge and Skelton Grange underline its direction of travel.
“A ‘green recovery’ from the economic impact of Covid-19 and a focus on transitioning the UK economy towards net zero should play to SSE’s strengths and position it well for the future.”
The results come the day after Prime Minister Boris Johnson announced a new 10 point plan to bring about a “green industrial revolution” in the UK.
The plan comes with a year to go before the UK hosts the United Nations’ COP26 climate change conference, which will be held in Glasgow.
Earlier this week it was announced that SSE would be one of four principal sponsors of the conference.
In his final set of results before stepping down, chair Richard Gillingwater said: “Challenges lie ahead – not least in navigating another wave of the pandemic, the potential operational impact of the weather in the second half and the lingering uncertainties around Brexit.
“But these are far outweighed by the wealth of significant opportunities we have to create value in the transition to net zero emissions.”
Shares in the firm were flat after the first hour of trading.