Heatwave singes SSE quarterly earnings as Npower merger pushes ahead

0 CEO Alistair Phillips-davies: commitment on investment Perth-based utility giant SSE has blamed Britain’s summer heatwave and rising wholesale gas prices for an earnings hit of about £80 million.

The group, which has been given shareholder approval to merge its energy and supply business with rival Npower, said households used 10 per cent less gas than expected over the quarter to the end of June as temperatures rose.

Trading has also been hit by poor wind conditions, which have affected its wind farm energy production, as well as “persistently” high wholesale gas prices.

It warned investors that the knock to underlying earnings in the quarter could impact its annual results, depending on market conditions for the remainder of its financial year.

Chief executive Alistair Phillips-davies said: “This new financial year has so far been characterised by lower-thanexpected output of renewable energy and persistently high gas prices, but, looking ahead, we are very focused on fulfilling our obligations to energy customers and delivering on our key priorities.

“Those priorities include successful delivery of our plans to invest around £1.7 billion in this financial year, and we are pleased with the progress of key projects, including the installation of the first two turbines at the Beatrice offshore wind farm.

“Investment of this kind supports our strategic goal of creating value in a sustainable way, including remunerating shareholders for their investment.”

Donald Brown, head of private clients at Brewin Dolphin Edinburgh, said: “SSE’S latest trading update held few surprises. However, the main news of the day actually came at the group’s AGM which waived through the proposed demerger of its household energy supply division and the merger with rival, Npower.”