Profits have fallen at Big Six energy supplier SSE, but the group has said it expects to be back in the black by the end of the year and plans to invest almost £2bn into its UK and Ireland operations.
Adjusted profit before tax fell by 13.3 per cent to £475.8m at SSE in the six months to 30 September, from £548.8m in the same period of last year.
This was driven by lower profits in its wholesale and retail businesses due to weather, lower customer numbers and essential energy infrastructure upgrades such as smart meter roll-out costs.
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Adjusted operating profit in its retail arm fell 40 per cent from £101.5m in 2015 to £60.5m, while wholesale profits dropped 24 per cent from £159.6m to £121m.
The FTSE 100-listed firm's adjusted earnings per share were down by more than a third to 34.2p from 45.9p last year, though SSE's interim dividend per share rose from 26.9p in 2015 to 27.4p in the first half of this year.
SSE said it plans to plough £1.85bn worth of investment and capital expenditure into its UK and Ireland operations this year as it develops "secure, sustainable and low carbon energy infrastructure for the future".
The group's share price was down two per cent to 1,545p in mid-morning trading.
Why it's interesting
The group, which operates brands such as Southern Electric, Scottish Hydro Electric and Atlantic, said today it is expecting to return to growth this financial year.
SSE also confirmed plans to use the proceeds from the sale of part of its stake in gas distribution company SGN to return value to shareholders, with an on-market share buy-back of around £500m, with around £100m to support investment in a new onshore windfarm at Stronelairg, near Fort Augustus in Scotland.
The company also has a 40 per cent stake in one of the largest ever private investments into Scotland, the 588MW 84 turbine Beatrice Offshore Wind Farm, which will power more than 450,000 homes, and SSE is building the largest wind farm in Ireland, Galway Wind Park.
Last week, energy regulator Ofgem ended an investigation into SSE after the utility committed to improving the services needed for competitors to connect customers to its distribution network in the South of England.
What SSE said
Chief executive Alistair Phillips-Davies said:
From building the clean, lower carbon generation we need for the future, the new and upgraded wires to transport energy around the country, and new, improved service for energy supply customers, SSE is investing in customers, in jobs, in the business supply chain and in Great Britain and Ireland's economies at a critical time.
There is greater competition in energy supply than ever, but SSE continues to deliver for customers, with the lowest number of complaints in the industry, leading service and a growing range of products and services.
This focus on customers and operational excellence means SSE is well positioned for the future.