SSE PLC: interim results
for six months ended 30 September 2024
13 November 2024
DELIVERING MISSION CRITICAL INVESTMENT
· Strong start to financial year, delivering adjusted earnings per share of 49.8p, in line with expectations:
§ Value creating investment helping to drive increased contribution from electricity networks and renewables which delivered over 95% of half year adjusted operating profits.
§ Balanced business mix provided resilience, as return to favourable weather conditions meant increased SSE Renewables profitability offset lower SSE Thermal contribution.
§ Strong Balance Sheet, with 94% of debt fixed at average cost of 4.0%.
§ Interim dividend of 21.2p declared, reflecting an increase of 6% on prior year.
· Reached mid-point of five-year clean power investment programme delivering world-class assets:
§ £1.3bn invested in first half, with ~90% invested across electricity networks and renewables.
§ Completion of £1bn+ combined investment in 443MW Viking onshore wind farm in Shetland and associated subsea HVDC transmission cable, connecting the islands to the GB grid for the first time.
§ Continue to progress turbine installations on Dogger Bank offshore wind farm, completion expected in the second half of 2025 with equity returns remaining comfortably above hurdle rates.
§ Construction commenced on £4.3bn Eastern Green Link 2 Joint Venture, the UK’s single largest electricity transmission project.
· Expectations unchanged for full year adjusted operating profits:
§ Increasing electricity networks contribution as inflation catch-up in Distribution more than offsets lower Transmission profits due to economically neutral capex tax relief, which is netted off revenue.
§ Increasing renewables contribution, as capacity additions and higher hedged prices come through.
§ Thermal and Gas Storage profitability of around £200m reflecting stable market conditions.
§ Adjusted Earnings Per Share guidance for 2024/25 to be provided later in the financial year.
· Group remains on track to deliver 2026/27 adjusted earnings per share of between 175 – 200p.
| FINANCIAL SUMMARY | Adjusted | Reported | |||||
| Sep 2024 | Sep 2023 | % mvmt | Sep 2024 | Sep 20231 | % mvmt | ||
| Operating profit (£m) | 860.2 | 693.2 | 24.1% | 902.8 | 644.3 | 40.1% | |
| Profit before tax (£m) | 714.5 | 565.2 | 26.4% | 845.9 | 615.3 | 37.5% | |
| Earnings per share (p) | 49.8 | 37.0 | 34.6% | 47.7 | 30.7 | 55.4% | |
| Investment, capital & acquisitions (£m) | 1,292.1 | 1,054.3 | 22.6% | 1,573.3 | 1,320.4 | 19.2% | |
| Net Debt and Hybrid Capital (£bn)2 | (9.8) | (8.9) | 10.1% | (8.7) | (8.1) | 7.4% | |
1Prior period reported figures have been restated, for further details see note 2(v) to the Interim Financial Statements
2Reported net debt excludes equity accounted hybrid capital, for full reconciliation to adjusted net debt see Alternative Performance Measures section of Interim Financial Statements
Alistair Phillips-Davies, Chief Executive, said:
“This is a strong set of interim results including delivery of higher-quality earnings and the mission-critical infrastructure that shows SSE is at the heart of the clean energy transition.
“We are encouraged by the increasing attractiveness of our main markets and our alignment with the new UK Government’s mission to achieve Clean Power by 2030.
“SSE will be a key delivery partner with our ~£20bn investment programme and the scale and quality of our project pipeline that spans renewables, electricity networks and flexible power plants – which will all be required to make clean power a reality.
“Our unique position gives us exceptional growth opportunities and clear targets that will deliver long-term value to shareholders and society.”
highlights: Delivering ON OUR INVESTMENT
· Financial performance in line with expectations, reflecting strong operational delivery
§ Adjusted earnings per share of 49.8p, in line with expectations and reflecting lower level of seasonality given upweighted earnings contribution from regulated electricity networks businesses.
§ Reported earnings per share of 47.7p also reflects positive fair value movements on derivatives offset by an increase in Deferred Tax driven by capital allowances on an accelerating capital investment programme.
§ Electricity networks adjusted operating profits increased by 50% on prior period, as expected lower revenue in Transmission was more than offset by multi-year inflation catch-up through Distribution tariffs.
§ Renewables adjusted operating profit increased by 3.9 times on prior period, as combination of 1GW+ increase in operating capacity and return to favourable weather conditions drove ~45% increase in output with long-established hedging approach providing ~30% increase in hedged prices.
§ Thermal and Gas Storage adjusted operating losses impacted by more stable market environment, partly driven by return to Renewables-favourable weather conditions over the period.
§ SSEN Transmission successfully launched in August 2024 its debut issuance in the Euro bond market with a €850m 8-year Green Bond at an all-in fixed funding cost of 4.95%. In October 2024, both SSE and SSEN Transmission replaced existing revolving credit facilities with new sustainability linked facilities totalling £3.0bn gross.
§ Adjusted investment, capital and acquisition expenditure of £1.3bn, with ~90% focused on clean power infrastructure across electricity networks and renewables.
§ Adjusted net debt and hybrid capital at £9.8bn, in line with expectations, with strength of balance sheet maintained alongside the strong investment grade credit rating.
· Mid-point in five-year ~£20bn clean power Net Zero Acceleration Programme Plus
§ Full energisation of Shetland HVDC link – a 260km subsea transmission cable that connects the islands to the GB energy grid for the first time – and completion of associated 443MW Viking wind farm both delivered in August 2024, representing an investment of over £1bn.
§ Construction commenced on Eastern Green Link 2 (EGL2), a 2GW subsea HVDC project being delivered in partnership with National Grid, which is the UK’s single largest electricity transmission project transporting enough electricity to power two million UK homes. EGL2 was the first project to receive “fast track” approval through Ofgem’s Accelerated Strategic Transmission Investment (ASTI) framework.
§ SSEN Transmission is continuing progress on remaining Large Onshore Transmission Investments (LOTI) and ASTI projects, receiving final consents for Argyll and Kintyre 275kV upgrade and commencing construction on £900m+ Orkney-Caithness link.
§ Major projects under way within SSEN Distribution, with framework agreements worth £1.3bn+ having been agreed with delivery partners and over 750MW of distributed flexibility procured under the business plan.
§ Continuing to progress 3.6GW Dogger Bank offshore wind farm which, when complete, will be the world’s largest offshore wind farm. With turbine installation ongoing on Dogger Bank A but the winter months fast approaching, completion is expected in the second half of 2025. Monopile and transition piece installation on Dogger Bank B continues to make good progress, with procurement of a second turbine installation vessel under way. Despite slower than expected progress on turbine installation, equity returns across all three phases remain comfortably above hurdle rates.
§ Completion of the Tummel Bridge hydro-electric power station refurbishment, investing £50m to increase capacity potential to 40MW whilst also extending the plant’s working life by at least 40 years.
§ Success in the UK sixth Contract for Difference auction (AR6) with 130MW Cloiche onshore wind farm and in Ireland’s fourth Renewable Electricity Support Scheme auction (RESS 4) with 60MW Drumnahough onshore wind farm Joint Venture.
§ Entered commercial operations on 55MW Slough Multifuel, a Joint Venture with CIP, ahead of schedule. The facility is expected to process around 480,000 tonnes of residual waste each year, backed by a 15 year capacity contract, with steam produced being re-used on the Slough Trading Estate.
§ Progress made in selected international markets with ~100MW onshore wind under construction across Spain, France and Italy and auction success in the Netherlands with 2GW Ijmuden Ver Alpha offshore wind farm Joint Venture.
Key Performance Indicators
| Financial Performance | Adjusted | Reported | |||
| Sep 2024 | Sep 2023 | Sep 2024 | Sep 20231 | ||
| Operating profit £m | 860.2 | 693.2 | 902.8 | 644.3 | |
| EBITDA £m | 1,323.0 | 1,109.6 | 1,290.7 | 987.9 | |
| Profit before tax £m | 714.5 | 565.2 | 845.9 | 615.3 | |
| Earnings per share (EPS) pence | 49.8 | 37.0 | 47.7 | 30.7 | |
| Interim dividend per share (DPS) pence | 21.2 | 20.0 | 21.2 | 20.0 | |
| Investment, capital and acquisitions £m | 1,292.1 | 1,054.3 | 1,573.3 | 1,320.4 | |
| Net debt and hybrid capital £m | 9,843.8 | 8,943.8 | 8,688.8 | 8,050.6 | |
| SSEN Transmission RAV – £m (100% basis) | 6,359 | 5,289 | |||
| SSEN Distribution RAV – £m | 5,528 | 5,138 | |||
| SSE Total Electricity Networks RAV – £m (100% basis) | 11,887 | 10,427 | |||
1Prior period reported figures have been restated, for further details see note 2(v) to the Interim Financial Statements
| Performance against 2030 Goals | Sep 2024 | Mar 2024 | Sep 2023 |
| Cut carbon intensity by 80% | |||
| – Scope 1 GHG intensity (gCO2e/kWh) | 207 | 205 | 232 |
| Increase renewable energy output fivefold | |||
| – Renewable generation output (TWh)1 | 5.4 | 11.2 | 3.8 |
| Enable low-carbon generation and demand | |||
| – Renewables connected in SSEN Transmission network area (GW)2 | 10.6 | 9.3 | 9.2 |
| Champion a fair and just energy transition | |||
| – Contribution to GDP UK and Ireland (£bn / €bn)3 | – | 5.96/1.06 | – |
| – Jobs supported in UK and Ireland2 | – | 53,230/3,270 | – |
1 Includes SSE Renewables total output inc. pumped storage, battery, and constrained off wind in GB, as well as biomass asset in Enterprise
2 Transmission and distribution connected capacity within the SSEN Transmission Network area, includes pumped storage and battery storage
3 Direct, indirect and induced Gross Value Added and jobs supported, from PwC analysis
| Safety Performance | Sep 2024 | Mar 2024 | Sep 2023 |
| Total Recordable Injury Rate per 100k hours worked (SSE & contractors) | 0.16 | 0.20 | 0.24 |
Investor Timetable
| Interim ex-dividend date | 2 January 2025 |
| Record date | 3 January 2025 |
| Scrip reference pricing days | 2-8 January 2025 |
| Scrip reference price confirmed and released via RNS | 9 January 2025 |
| Q3 Trading Statement | Around 31 January 2025 |
| Final date for receipt of scrip elections | 31 January 2025 |
| Interim dividend payment date | 27 February 2025 |
| Notification of Closed Period | Around 31 March 2025 |
| Preliminary results for the year ended 31 March 2025 | 21 May 2025 |