July 19, 2018 / 6:33 AM / 3 months ago

SSE loses more customers on pricing competition

(Reuters) - SSE Plc (SSE.L), Britain’s second-largest energy supplier, lost more customers in the first quarter compared with the year-earlier period as smaller entrants challenge traditional players with aggressive pricing.

Persistently high gas prices added to costs, while unusually warm weather led to consumers using less electricity, the company said on Thursday.

Shares of the Perth, UK-based company fell about 2.6 percent in early trading on the London Stock Exchange, and were among the top percentage losers on the UK bluechip index .FTSE.

The so-called “Big Six” legacy energy suppliers in the UK, including SSE, also face a proposed cap on retail prices by Prime Minister Theresa May’s government.

Total customer accounts fell to 7.45 million as of June 30, the company said. SSE lost 320,000 customers in the quarter, compared with 230,000 customer losses in the year-ago period.

Warmer weather and higher costs reduced adjusted operating profit by about 80 million pounds in the quarter, the company said, adding that it could impact its full-year results.

SSE, whose electricity networks transmit and distribute electricity to around 3.7 million homes, businesses and offices, is combining its retail power unit with Npower, owned by Germany’s Innogy, to create UK’s second-largest retail power provider.

The deal would reduce the “Big Six” to five and give SSE and Npower 11.5 million customers, making the new company second only to Centrica’s (CNA.L) British Gas.

Reporting by Muvija M in Bengaluru; Editing by Amrutha Gayathri

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