UK energy provider SSE swung to an interim loss in what it called “unprecedented” market volatility” as gas storage earnings amid soaring prices offset weaker earnings from renewables.
The company on Wednesday posted a pre-tax loss of £511m loss compared with a profit of £1.6bn last year. Profitability in renewables was negatively affected by the pace of project delivery and unfavourable weather, exacerbated by the associated requirement to buy back hedges in a higher-price environment.
On an adjusted basis profits more than doubled to £559m. Looking ahead, the company, which is pivoting towards 100% generation of renewable energy, said it still expected adjusted earnings per share for the full year of at least 120p.
“By any measure the current operating environment is challenging. However, market conditions that influenced financial performance in the first half of the year have also highlighted the value of our integrated business model, with lower-than-expected renewables output being more than offset by earnings derived from gas storage and thermal assets that have been responding to system demand when needed most,” SSE said.
Reporting by Frank Prenesti for Sharecast.com
