Daily Mirror (Northern Ireland)
SSE paying out despite losses
POWER FIRM HIT BY COMMODITY COST
POWER group SSE will pay out nearly £314million in dividends to shareholders despite falling £511million into the red due to volatile commodity prices.
Although SSE’S first-half revenues rose 58.9% to £5.6billion, it plunged from a pre-tax profit of £1.7bn last year to a £511m loss – primarily due to a £2bn hit it took on its forward commodity contracts with suppliers.
Forward supply contracts enable energy firms to buy the power, gas and commodities they need to operate at an agreed price in the future, giving them future cost certainty.
However, market volatility meant the contracts lost SSE money.
The firm’s renewable energy division also suffered a loss as a lack of wind this year hampered its energy generation efforts, forcing it to source power at higher prices to meet demand.
Despite this, SSE declared a 29p per share interim dividend, a payday worth £313.8million to investors.
It said that despite its derivatives losses, it had performed well with “solid earnings” from its revenue generating operations. SSE is investing heavily in decarbonising its operations and chief executive Alistair Phillipsdavies said this would help prevent a repeat of the energy crisis that has caused power bills to soar. “Cheaper energy is on the way,” he said. “Had the UK’S 2030 renewable targets been met in 2022, Britain would have saved £30billion on gas this year alone.”