May 25, 2018 / 7:04 AM / in a year

SSE full-year profit slips due to customer attrition

(Reuters) - SSE Plc’s (SSE.L) full-year earnings per share fell 3.6 percent due to customer attrition and weakness in its power networks business but profit so far this year remains ahead of its expectations, the British energy supplier said on Friday.

Total customers for its domestic energy services fell nearly 6 percent to 6.8 million in the year ended March 31.

“While electricity tariffs increased to recognise rising non-energy costs, overall profits were also impacted by customer account losses and the introduction of price caps for certain customer groups, offset by ongoing efficiency savings,” the company said.

Adjusted operating profit at its network business, which includes power transmission and distribution, fell 25.8 percent to 195.6 million pounds, mainly due to the phasing of capital expenditure on significant projects.

The country’s second-biggest energy supplier said adjusted earnings per share fell to 121.1 pence from 125.7 pence a year ago, but was marginally ahead of company’s prior guidance range of 116 to 120 pence.

Power suppliers in Britain have been under pressure from the emergence of small and aggressive rivals as well as by a cap on retail prices proposed by Prime Minister Theresa May’s government.

Britain’s “big six” energy suppliers - Centrica’s (CNA.L) British Gas, Iberdrola’s (IBE.MC) Scottish Power, E.ON (EONGn.DE), EDF Energy (EDF.PA), SSE and Innogy (IGY.DE) -owned Npower - are all currently struggling.

SSE hiked its full-year dividend by 3.7 percent to 94.7 pence and said it could recommend a payout of 97.5 pence in the current year, an increase of 3 percent from a year ago.

Over the five years to March 2023, SSE said it expects to spend about 6 billion pounds, with 1.7 billion pounds in 2018-2019.

The merger of SSE’s UK retail energy supply businesses with Npower is currently under investigation by British regulators.

The merger would create Britain’s second-largest retail power provider and reduce the “big six” dominating the market to five companies.

Reporting by Justin George Varghese in Bengaluru; Editing by Sunil Nair and Arun Koyyur

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