- SSE to report half-year underlying earnings per share (EPS) of at least 30p
- Full-year guidance maintained, expecting underlying EPS of at least 150p
- Renewables output around 19% behind plan
Aarin Chiekrie, equity analyst at Hargreaves Lansdown:
“Mother nature weighs on performance at SSE. The pivot towards renewable energy is a bold and admirable move for the power utility company but it comes with a hefty dose of risk, since they are not always reliable. Adverse weather conditions in the first half meant that renewables output was around 19% behind plan. And the gas storage arm, which buys when prices are low and sells when prices are high – effectively benefitting from price volatility, will run at a loss in the first half due to the relatively stable market environment. However, this division should swing back into profit over the full year when the gas is withdrawn.
Given this slippage, SSE’s only expecting to report underlying earnings per share (EPS) of at least 30p in the first half. But that’s where the group’s diverse portfolio of assets comes in. Flexible thermal assets continue to demonstrate their value in the group’s energy system, helping to plug some of the energy shortfalls from renewable assets. It’s also worth keeping in mind that power utilities are seasonal beasts anyway, given the increased demand during the winter months. So despite an underwhelming first-half performance, the full-year underlying EPS guidance of at least 150p per share remains intact.”
For access to stock reports and articles please visit the Hargreaves Lansdown share research homepage or sign up to our updates here.
