Perth power giant SSE’s shares slumped in early trading exchanges as it revealed a £190 million hit to operating profits.
Chief executive Alistair Philips-Davies described the group’s recent financial performance as “disappointing and regrettable” and blamed dry, still and warm weather and persistently high wholesale gas prices for the underperformance.
The figures – which pushed shares more than 8% lower in the first hour of trading on the London Stock Exchange – relate to the first five months of the financial year to August 31.
SSE now expects adjusted operating profits for the six months to September 30 to be around half that delivered in the same period last year.
The firm expects its wholesale business – which includes revenues from its own gas production – to make a adjusted operating loss for the first half.
Its retail arm – which is currently the subject of a merger with npower to create a separate company – is expected to be at break even, while its networks unit is operating in line with budget.
It added it expected operating profits from SSE Energy Services to be “significantly lower” for the full year 2018/19 than had been forecast.
Alistair Phillips-Davies, Chief Executive of SSE, said: “Lower than expected output of renewable energy and higher than expected gas prices mean that SSE’s financial performance in the first five months has been disappointing and regrettable.
“The underlying quality of SSE’s businesses remains strong, with regulated networks and renewables providing the core of what will be an infrastructure-focused SSE group in the years ahead.
“This year’s £1.7bn programme of capital investment, mainly in regulated networks and renewables, has continued to go well in recent months; and we are very pleased that the CMA’s provisional findings in relation to the planned SSE Energy Services transaction means we are on course to reshape and renew the SSE group by the end of our financial year.
“Reshaping and renewing the SSE group will support the delivery of our five-year dividend plan in the years ahead.”