Notification of closed period29 Sep 2021
- Strategic focus remains clear and progress continues with the announcement of entry into the Japanese offshore wind market.
- Operational performance in Renewables impacted by market volatility and unfavourable weather conditions with output down 32% or 1.2TWh in the period to 22 September, an 11% shortfall on forecast total output for the full year.
- Financial outlook expecting to report adjusted earnings per share in the range of 7.5p to 10p for the half-year. Due to the resilience of SSE’s business mix it remains confident about delivery of solid financial performance for the full year.
SSE plc is due to publish and virtually present its financial results on 17 November 2021 for the six months to 30 September 2021.
As outlined within its RNS on 20 September in response to media speculation, the Board remains – as ever – fully focused on strategic choices which will drive shareholder and societal value from the wealth of net zero opportunities SSE is creating.
Through the successful £2.7bn disposal programme which has further reshaped the group towards low-carbon electricity infrastructure, SSE's strategic focus is on renewables and regulated electricity networks, supported by carefully chosen complementary businesses which include flexible low-carbon generation. Its business mix contains exciting growth potential aligned with net zero targets and shares common capabilities in the development, building, operation and financing of low-carbon electricity infrastructure. SSE is currently building more offshore wind than any company in the world, expanding internationally, and investing in the decarbonising infrastructure that society needs.
As outlined in May, SSE will provide an update on its plans to further accelerate growth in its portfolio with its Half-year Results in November. This will include details of upweighted capital investment for the period to 2026, the sources of funding to underpin the plans, as well as the company's vision for further growth ambitions extending into the 2030s.
As the Board progresses its plans to accelerate growth and create value, it will continue to engage with shareholders and other stakeholders.
In the period since reporting of its Full-year Results on 26 May 2021, SSE has:
- Today separately announced its entry into the Japanese offshore wind market through the creation of a new offshore wind joint ownership company with Pacifico Energy, one of Japan’s largest developers of renewable energy, which includes the acquisition of an 80% interest in an offshore wind development platform.
- Amalgamated Berwick Bank and Marr Bank offshore wind farms, off the east coast of Scotland, into one single wind farm – now known as Berwick Bank wind farm. With a potential capacity of up to 4.1GW, Berwick Bank wind farm would more than double the size of current offshore wind either in construction or currently operational in Scotland.
- Continued to make good progress on the construction of its offshore wind projects, with Seagreen receiving delivery of its first jackets at the Port of Nigg ahead of installation in the autumn and on Dogger Bank, onshore construction on both phases A and B is progressing to plan. The first offshore works will commence in Q2 2022 with installation of the HVDC export cables for Dogger Bank A.
- SSE Renewables, through its newly incorporated entity SSE Renewables North America, has submitted a pre-qualification application to the Bureau of Ocean Energy Management (BOEM) to participate in the New York Bight Auction in the USA
- Submitted an Initial Needs Case under the RIIO-T2 Uncertainty Mechanism for a proposed £400m replacement transmission line between Fort Augustus and Skye and will shortly be submitting an Initial Needs Case for upgrading the Argyll transmission network to 275kV operation.
- Published and engaged with stakeholders on a comprehensive and ambitious RIIO-ED2 business plan, ahead of submission to Ofgem in December.
- Welcomed COP26 President Alok Sharma to the former Ferrybridge power station for the symbolic demolition of the coal-fired plant’s chimney stacks.
The output from SSE Renewables’ assets in the period from 1 April to 22 September was around 32% or 1.2TWh below plan, which, given the seasonal nature of the business, represents an 11% shortfall on SSE's forecast total output for the full year. This shortfall was driven by unfavourable weather conditions over the summer, which was one of the least windy across most of the UK and Ireland and one of the driest in SSE’s Hydro catchment areas in the last seventy years.
Performance was also affected by the requirement to buy back hedges in volatile markets.
Both scheduled and unscheduled outages have had an impact on availability of SSE’s Thermal plant, but market volatility has improved performance at SSE’s Gas Storage operations in recent months.
SSE remains focused on long-term, sustainable financial performance, and it remains confident about delivery of solid financial performance for the full year. In light of the factors outlined above, SSE expects to report adjusted earnings per share in the range of 7.5p to 10p for the half-year.
Also, and in line with its dividend plan to 2023, SSE expects to recommend a full-year dividend of 80 pence plus RPI inflation. Based on RPI of 3.75%, an interim dividend for 2021/22 of 25.3 pence is expected to be paid in March 2022.
Finance Director, Gregor Alexander, said:
"SSE's very deliberate mix of economically regulated and market-based businesses provides resilience against seasonal variability. The operational issues we've faced in the first half are, by their nature, time-limited and the key months of our financial year are still to come.
"The successful reshaping of the Group through our disposals programme has sharpened the focus on our core renewables and electricity networks businesses, and those businesses that are truly complementary to them. We are creating significant growth opportunities, most recently with our Japanese announcement today.
“We look forward to updating the market with an ambitious new investment plan that will optimise the SSE Group's options and opportunities in the transition to net zero, and to partnering with the UK Government as Principal Partner of COP26 in Glasgow."