Profits at energy giant SSE fall as it loses 430,000 customers
- Published
Operating profit at SSE's household supply business was flat at £260.4m
Profits at energy giant SSE fell last year as it lost 430,000 customers.
SSE was also hit with "exceptional charges" linked to the merger of its retail arm with rival Npower.
The group reported a 6% fall in adjusted pre-tax profits to £1.45bn in the year to March 31, while bottom-line profits were down 39% to £1.09bn. Revenue rose 8% to £31.23bn.
SSE pointed to competitive pressures as the number of domestic energy accounts fell from 7.23 million to 6.8 million.
'Major transition'
Chairman Richard Gillingwater said: "As expected, 2017-18 presented a number of complex challenges to manage, but SSE's operational performance was generally very robust.
"The challenges will continue in 2018-19, which is also expected to be a year of major transition for SSE.
"For investors, by giving clarity on the dividend for the five years to March 2023, SSE is demonstrating that remunerating them for their investment is and will remain its first financial objective."
Operating profit at SSE's household supply business was flat at £260.4m, despite higher energy consumption in the final quarter as customers turned up the heat to combat the cold weather front, dubbed the Beast from the East.
SSE's proposed merger plans with Npower would see the big six energy companies become the big five
Perth-based SSE also recognised £213.3m worth of "exceptional charges", including more than £60m in IT costs related to its controversial deal with Npower.
The merger of Npower and SSE's retail operations is undergoing a competition investigation after the two energy giants failed to address concerns.
The deal would see the so-called big six energy companies become a big five.
Second biggest
The UK's competition watchdog, the Competition and Markets Authority, has warned the planned merger could reduce competition and push up prices for some customers.
Under the proposed deal, the new company will be listed on the London Stock Exchange, with SSE shareholders holding 65.6% and Npower owner Innogy holding 34.4%.
SSE said the deal remained on track for completion in the last quarter of 2018 or the first quarter of 2019.
The group, formerly known as Scottish and Southern Energy, is Britain's second biggest energy supplier and the merged group will serve about 11.5 million customers.
Centrica, Iberdrola (Scottish Power), E.On and EDF make up the remainder of the big six energy companies.
The deal has come as the UK energy market is already under pressure amid concerns over unfair tariffs, with a government-enforced price cap set to be introduced on standard variable tariffs (SVTs) later this year.