LONDON (Alliance News) - Scottish energy company SSE PLC said Wednesday its interim profit will be half of what it produced in the first half of 2017, blaming hot weather and dear gas.
The FTSE 100-listed energy company said the "dry, still and warm" weather, coupled with "consistently" high gas prices has hurt adjusted operating profit.
In the first five months of SSE's financial year ended August, SSE said its adjusted operating profit was GBP190 million lower compared to the year before.
The higher than expected gas prices accounted for "just under half", with the impact of the weather accounting for "most of the remainder".
SSE said it expects a "significant reduction" in adjusted operating profit in its Generation division, which posted a profit of GBP160.7 million last year, and an adjusted operating loss of about GBP100 million in its Energy portfolio.
Wholesale businesses are expected to report a loss, from a GBP159.9 million profit in the first half of 2017, but the Gas Production arm is expected to increase its adjusted operating profit, which was GBP4.5 million in 2017.
Looking ahead, SSE said it will continue to recommend a full year dividend of 97.5 pence per share, up 3.0% from 94.7p in 2017.
The company also said UK gas regulator Ofgem's proposed tariff cap, set to start at the beginning of 2019, could result in its Energy Services division's adjusted operating profit being "significantly lower" than expected.
Chief Executive Officer Alistair Phillips-Davies said: "Lower than expected output of renewable energy and higher than expected gas prices mean that SSE's financial performance in the first five months has been disappointing and regrettable.
"The underlying quality of SSE's businesses remains strong, with regulated networks and renewables providing the core of what will be an infrastructure-focused SSE group in the years ahead.
"This year's GBP1.7 billion programme of capital investment, mainly in regulated networks and renewables, has continued to go well in recent months; and we are very pleased that the CMA's provisional findings in relation to the planned SSE Energy Services transaction means we are on course to reshape and renew the SSE group by the end of our financial year.
"Reshaping and renewing the SSE group will support the delivery of our five-year dividend plan in the years ahead."
Shares in SSE were down 7.7% Wednesday morning at 1,154.50 pence each, the worst performer in the FTSE 100 index of London large-caps.
SSE (SSE)