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Notification of Closed Period

04 Oct 2023

Ahead of the publication on 15 November 2023 of results for the six months to 30 September 2023, SSE plc is today updating the market on its performance and outlook, including:

  • Expecting to report half-year adjusted earnings per share of at least 30 pence
  • Balanced, diversified business model continuing to underpin expected full-year adjusted earnings per share of more than 150 pence
  • Continuing focus on disciplined execution of growth strategy, with progress made on key projects

Half-year financial outlook

SSE expects to report interim adjusted earnings per share of at least 30 pence, largely reflecting the normal seasonal nature of operations that deliver the majority of annual earnings in the second half of SSE's financial year.

This guidance takes into account renewables performance which remains below expectations, with output around 19% behind plan for the six months to 30 September, mainly due to adverse weather conditions. This represents around a 7% shortfall relative to the full year's planned output. It also reflects a more stable market environment which is expected to drive a seasonal half-year loss for gas storage, before reverting back to a profit for the full year when gas is withdrawn. Finally, flexible thermal assets have continued to demonstrate their value to the energy system during the period.

Following the successful issuance of a €750m eight-year Green Bond in September 2023 at a fixed coupon of 4.0%, adjusted net debt is expected to be around £9bn at 30 September 2023, with over 90% of financing still held at fixed rates.

Progress against strategy

The Group made further progress in execution of its Net Zero Acceleration Programme (NZAP) Plus, with recent highlights including:

  • Success of four large onshore wind projects in the UK's fifth Contract for Difference (CfD) Allocation Round, with a total of 605MW receiving 15-year contracts with a guaranteed strike price of £52.29/MWh (2012 prices), annually indexed for CPI inflation.
  • Finalising the commissioning of Seagreen, Scotland's largest and the world's deepest fixed-bottom offshore wind farm.
  • Expecting first power on Dogger Bank - the world's largest offshore wind farm - in the coming days, with work now underway in the complex turbine installation stage of the project.
  • All 103 turbines installed at Viking onshore wind farm, as the project now pushes towards energisation in summer 2024.
  • SSEN Transmission and National Grid Electricity Transmission have secured development and planning consent for Eastern Green Link 2, with key elements of the supply chain now also secured.
  • Secured regulatory approvals under the Large Onshore Transmission Investment framework for transmission links to Orkney and Skye, alongside a 'minded to approve' decision for the Argyll reinforcement.
  • Confirmation from UK Government that the Acorn and Viking CCS clusters in Scotland and North East England have been selected to progress in Track 2 of the cluster sequencing process, leaving SSE's Peterhead and Keadby carbon capture projects well positioned.
  • Commencement of construction in France on Chaintrix, a 28MW onshore wind farm and SSE's first from the Southern Europe onshore development platform acquired in late 2022.

Full-year financial outlook

The lower power price environment and more stable market conditions are expected to continue for the remainder of this financial year but through its balanced portfolio of assets across electricity networks, renewables, flexible generation and storage, the Group still expects to deliver full-year adjusted EPS of more than 150 pence which is unchanged from guidance given in May 2023.

With the key winter months to come, full-year performance remains subject to weather conditions, plant performance and market conditions. These risks will be carefully managed through the second half and SSE expects to provide updated guidance on full-year EPS later in the year.

Finance Director, Gregor Alexander, said:

"Our primary focus remains on delivery of our five-year plan out to 2027, which is the platform for up to £40bn of investment in net zero over the next decade. We have reached key milestones in the construction of our flagship renewables projects while gearing up to accelerate the build-out of critical network infrastructure and offering much-needed flexibility to the system.

"Our strong balance sheet and financial discipline continue to allow us to progress growth options within our diversified pipeline selectively. In the long-term, there remains broad support for the accelerated build-out of secure, affordable, low-carbon electricity infrastructure - both in the UK and internationally - enabling the continued creation of shareholder and societal value."