Energy company SSE has reported a fourfold increase in its profits but emphasised the scale of its investment in the UK’s renewable sector as the government prepares a windfall tax on electricity generators.
SSE’s adjusted earnings after tax in the six months to September rose to £450mn, from £111mn in the same period last year, buoyed by the volatility in gas and electricity prices that has stoked a cost of living crisis.
Reported or unadjusted earnings before tax, however, swung to a loss of £511mn, from a profit of £1.7bn in 2021. The reported loss was primarily affected by a reduction in the value of long-term commodity contracts, the company said.
SSE’s “good strategic and financial performance” had enabled the energy group to invest a record £1.7bn during the period, chief executive Alistair Phillips-Davies said, as he alluded to the need for government backing to help tackle the energy crisis.
“With a supportive government policy environment, SSE alone could invest more than £24bn in Britain by the end of this decade,” he said on Wednesday.
“By SSE’s own estimates, if the investment required to meet 2030 targets had been delivered by 2022, about £30bn would have been saved in GB expenditure on gas this year,” he added.
UK chancellor Jeremy Hunt is expected to introduce a windfall tax on electricity generators in his Autumn Statement on Thursday as the government seeks to fill a budgetary hole that was worsened by the need to provide support to household and business energy bills this winter.
But electricity groups have cautioned the government must avoid deterring investment at a time when companies are being asked to accelerate the move towards renewables.
SSE’s earnings per share were 41.8p for the period in line with previous guidance, with full-year guidance unchanged at 120p per share.
The company, which is one of the largest renewable energy and network operators in the UK, said it had strong results from its gas storage business offsetting lower returns from renewables that had been affected by adverse weather conditions during the period.
SSE shares slipped 2 per cent to £16.19 in early London trading. They have declined 3 per cent this year.