SSE half year results not as bad as expected

image captionSSE said a 25% increase in wholesale gas prices had impacted on profits

Scottish and Southern Energy reassured the Stock Market on Wednesday with profits sliding less than expected, and a dividend ahead of inflation.

The Perth-based utility said profits had taken a hit from wholesale gas prices rising by 25%.

And output from renewable energy assets came in below expectations, it said.

Earlier this month, SSE announced a 9.4% increase in its gas pricing for customers, and confirmed that trading conditions remained "challenging".

In a statement to the London Stock Exchange, the firm told shareholders its customer base had now hit the 10 million mark, mostly in southern England, as Southern Electric, and Scotland, where it trades as Scottish Hydro-Electric.

Its brands also include Swalec and Atlantic.

'Remains good'

The first half of the company's financial year saw pre-tax profits down 6.1% to £386m.

The dividend increase, at 6.7%, was in line with a promise to boost shareholder rewards.

Chief executive Ian Marchant said: "We've been crystal clear we can sustain the dividend growth by 2% above inflation."

Lord Smith of Kelvin, SSE chairman, said the company would have to remain financially disciplined.

"Our ability to sustain above-inflation dividend increases for what would be the 12th successive year illustrates yet again the resilience in SSE, built as it is on operating and investing in a balanced range of economically-regulated and market-based energy businesses," he said.

"The past six months have not been easy, with low renewable energy output and higher wholesale gas costs contributing to a challenging business environment, and this is reflected in our financial performance over the period.

"Despite these issues, the underlying performance of SSE remains good."

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