(Adds details, CEO comment)
By Nina Chestney
May 17 British energy supplier SSE
reported higher full-year earnings per share than expected on
Wednesday due to an increase in its wholesale business.
In preliminary results for the year ending March 31, SSE
raised its full-year adjusted earnings per share to 125.7 pence
from 120 pence the previous year and above analyst expectations
of 122-125 pence per share.
SSE also raised its full-year dividend per share to 91.3
pence from 89.4 pence last year.
SSE Chairman Richard Gillingwater said the company continues
to face a number of challenges.
"This strategy puts the company in good stead for the future
and SSE is committed to delivering for its customers and its
investors alike in the years ahead, and to continuing to meet
its first financial objective of annual dividend growth of at
least RPI inflation," he added in a statement.
The firm said it is working to keep its dividend cover
within an expected range of 1.2-1.4 times, though it is likely
to be at the bottom of that range, which means adjusted earnings
per share is likely to be lower than it was in 2016/17.
Looking ahead, SSE said it expected to invest around 1.7
billion pounds in building, owning and operating assets. Around
two thirds of that is investment in electricity networks and
The company reported a 2.7 percent rise in adjusted
operating profit to 1.87 billion pounds ($2.42 billion) and a
6.1 percent increase in adjusted profit after tax to 1.27
Its wholesale business reported an operating profit of 498.2
million pounds compared with an operating loss of 481.3 million
However, SSE's gas storage business recorded an adjusted
operating loss of 13 million pounds, compared with an adjusted
operating profit of 4 million pounds the previous year, due to
challenging market conditions.
Analysts at Morgan Stanley said the wholesale business
delivered results above expectations, driven by better gas
production, thermal generation and energy trading.
"Better gas production volumes should continue in to future
years following Greater Laggan (gas fields) ramp-up. However,
renewables output was low and there was a 18 million pound
write-down of gas production assets following an audit of
reserves," they said in a note.
($1 = 0.7745 pounds)
(Reporting by Nina Chestney and the Bangalore newsroom, editing
by Louise Heavens)