SSE plc Reports Strong Results

Shares of SSE plc (LON:SSE) rose on Wednesday following their robust half-year results, reporting adjusted EPS of 49.8p, exceeding their prior guidance of at least 45p.

Full-Year EPS Target Reaffirmed

SSE has reaffirmed its full-year EPS target and is maintaining guidance for adjusted EPS between 175-200p by FY27.

Investment in Clean Energy

The energy giant remains on track with its £20 billion clean energy investment program, having spent £1.3 billion in capex thus far in this fiscal year.

Financial Overview

Net debt stands at £9.8 billion, with capital expenditures projected around £3 billion in FY25. Despite high spending, SSE anticipates its net debt-to-EBITDA ratio to remain at the lower end of the 3.5-4.0x range.

Key Growth Drivers

The company’s Networks division was a substantial growth driver, with EBIT rising 50% to £504 million. SSEN Distribution saw contributions of £346.3 million, marking a 188% increase due to inflation adjustments boosting revenues.

Segment Performance

Conversely, the Transmission segment experienced a 27% drop in EBIT, attributed to the effects of capital allowances.

In Renewables, SSE enjoyed increased operating capacity and favorable wind conditions in Scotland, lifting EBIT by 286% to £335.6 million.

However, the Thermal Energy segment reported an EBIT loss of £44 million, which reflects a lack of opportunities for flexible thermal and gas operations in a more stable market.

Seasonal factors also impact gas storage, but SSE reaffirmed its full-year adjusted operating profit forecast of £200 million for these assets.

Leadership Transition

Separately, CEO Alistair Phillips-Davies will retire in 2025 but plans to stay in his role until a successor is appointed, ensuring a smooth transition.

Analysts at RBC Capital Markets commented, “The move to ensure a smooth leadership transition should be well received, whilst we expect that gas prices may be a focus of the call alongside any further details that can be provided on offshore project timings/costs.”