SSE profit soars 89 per cent as it ramps up spending on green projects
FTSE 100 energy giant SSE reported an 89 per cent jump in its adjusted pre-tax profit today after benefitting from higher energy prices.
The firm’s annual profit rose from £1.16bn in 2022 to £2.18bn for the year ending in March.
It also said it would accelerate its five-year net zero plan to 2027, increasing its investment in green projects by 40 per cent to £18bn.
Chief executive Alistair Phillips-Davies said the spending bump “raises the bar” on its green ambitions “and provides a solid platform for growth that could see us invest up to £40bn over the next decade”.
“Action, not just ambition, is what is needed to provide lasting solutions to the problems of climate change, energy affordability and security – and, with a record-breaking investment programme, that is what we are delivering,” he added.
However, the firm cut its dividend for 2023/24 by 38 per cent to 60p per share to help fund the investment.
Its share price had not changed at the time of reporting, trading at around 1,870p.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said SSE was “ahead of the pack” regarding its investment in renewable energy, but warned this wasn’t a risk-free move.
“The transition will be costly, and it’ll likely be a long road until renewables can generate cash more reliably, which adds a layer of risk to SSE in the near-to-medium term,” he said.
Russ Mould, investment director at AJ Bell, noted the firm’s keen emphasis to highlight its green credentials as reporting bumper profits after much of the public has been forced to grapple with soaring energy bills could easily draw scrutiny.
“Profit with a purpose is a good sound bite, but shareholders will want to see evidence that they are being rewarded for funding the company too,” Mould said.