Cash-rich SSE PLC (LON:SSE) has reiterated its commitment to its existing dividend plan for the next five years but its new reliance on renewable energy has seen output fall short of its expectations at its wind farms and hydro stations due to unhelpful weather conditions.
The FTSE 100 energy company said it expects to recommend a dividend of 80p per share for the current year, in line with that pledge, which would be down from 97.5p a year earlier.
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Despite the weather conditions being unhelpful, with renewables output up 6% in the nine months to 31 December but 5% below plan, SSE said it still expects adjusted earnings per share in the range of 83p to 88p for the year to end-March.
Looking back at the past few months, the group completed the sale of its retail arm to Ovo Energy for £500mln a fortnight ago, in December submitted its final plan for the next regulatory price control period with a proposed £2.4bn of investment, and was given approval by Ofgem in principle for its planned contribution towards the proposed electricity transmission links to Shetland, Western Isles and Orkney.
Post the general election, the company noted that government policy as outlined in the Queen's speech included ambitions for offshore wind and carbon capture, usage and storage that it said “should present opportunities for SSE's renewables and thermal businesses”, with first ground breaking at Dogger Bank on 17 January and several preferred supplier agreements signed.
Looking forward, SSE has taken the final investment decision to proceed with the construction of an additional 11 onshore turbines at its Gordonbush wind farm, while its last coal-fired power plant, Fiddlers Ferry will cease production by the end of March.
SSE said “work is continuing” on its attempts to sell its gas production assets, but no deal is likely in the current financial year.
Finance director Gregor Alexander said: “Strategic execution, good operational performance and optionality in SSE's portfolio remain critical for driving societal and shareholder value.”