SSE profits hurt by falling energy prices

SSE is to cut its gas tariff by 5.3%

Energy firm SSE has said plummeting wholesale gas prices and lower household energy demand led to a 19% fall in annual profits.

It said pre-tax profit for the year to the end of March was £593m, compared with £735m a year earlier.

Operating profit at its wholesale gas division fell 94% to just £2.2m, from £36.6m a year earlier, as a result of the fall in gas prices.

Costs relating to its coal-fired power stations rose to £287m in the year.

In January, SSE cut its standard gas tariff for domestic customers by 5.3%.

But the UK's second largest energy company still lost about 300,000 energy customers in the year, leaving it with 8.2 million households and businesses.

SSE chief executive Alistair Phillips-Davies said the energy firm had coped well with "the impact of prevailing commodity prices and intense retail market competition".

"At the same time, SSE has continued to demonstrate financial discipline and commitment to its long-term strategic framework. The fact that some of the mist is beginning to clear around the legislative, political and regulatory environment means there are grounds for some cautious optimism for the next couple of years," he added.

"SSE continues to invest for the future and in the year ahead plans almost £1.75bn of investment into new energy infrastructure in the UK and Ireland and improvements in services for our customers,"

In March, SSE closed its Ferrybridge coal-fired power station in Yorkshire.

SSE also announced on Wednesday that it would be selling up to a third of its 50% stake in gas distribution business SGN to raise cash for shareholders or to reinvest.