SSE PLC (LSE:SSE) is due to release its half-year figures, with analysts forecasting the power company will report significant growth in earnings compared to last year.
Having recently upgraded SSE to ‘buy,’ UBS said the future could be “tipping favourably” for the former Scottish and Southern Energy.
This includes speculation that a profit cap on offshore renewable generators may have been dropped, alongside Rishi Sunak’s calls for investment in renewables at COP27 look set to benefit the company.
In an update on 27 September, SSE said it expects to report adjusted earnings per share of 40p, amid good performance from its gas and thermal sectors, but below-anticipated output from its renewables.
After Russia’s invasion of Ukraine caused gas prices to shoot up, SSE said additional profit will be reinvested in projects that “will provide long-term solutions that help reduce the UK’s exposure to volatile international gas prices”.
On the plus side for investors with a short timeline, it plans to complete a £125mln share buyback by the end of the year.
Gregor Alexander, SSE finance director said: “As an infrastructure company SSE’s over-riding response to the European energy crisis is to address the root cause of the problem”
In order to prevent future energy crises, he added: “We are committed to reinvesting any additional profits derived from market variability directly back into energy infrastructure.”
This disappointed short-term investors, though the group's shift towards renewables has helped it generate more than a 30% share price gain over the past three years, though in 2022 it is down slightly since the start of the year.