Soaring temperatures across Britain meant households used 10 per cent less gas than expected in the three months to 30 June, SSE’s latest trading update reveals.
The ongoing heatwave and sky-high wholesale gas prices mean the energy giant is expecting its first quarter profits to come in around £80million lower than forecast.
A lack of wind over the period has also caused the company problems with its operations, as output from its offshore and inland windfarms came in 15 per cent than expected.
Less demand: Soaring temperatures across Britain meant households used 10 per cent less gas than expected in the three months to 30 June, SSE said
The amount of electricity generated from SSE’s hydro power stations over their first quarter was 20 per cent lower than forecast, but still ahead of the results seen at the same point a year ago.
SSE also recorded another steep fall in household account numbers, with the group losing a further 130,000 accounts since the end of March.
Its total UK and Ireland energy customer accounts stood at 7.45million on 30 June, down from 7.77million a year earlier and 7.58million in March.
The group became the last ‘Big Six’ provider to hike bills in May, announcing that electricity and gas bills would rise by an average of 6.7 per cent, or £76 per year, in a move affecting 2.36million customers. The tariff hike took effect on 11 July.
Alistair Phillips-Davies, SSE’s chief executive, said: ‘This new financial year has so far been characterised by lower than expected output of renewable energy and persistently high gas prices, but looking ahead, we are very focused on fulfilling our obligations to energy customers and delivering on our key priorities.
‘Those priorities include successful delivery of our plans to invest around £1.7bn in this financial year, and we are pleased with the progress of key projects, including the installation of the first two turbines at the Beatrice offshore wind farm.
‘Investment of this kind supports our strategic goal of creating value in a sustainable way, including remunerating shareholders for their investment, and we are strongly committed to delivering the five-year dividend plan we set out in May.’
The temperature in the UK during the three months to 30 June was 1.5 degrees centigrade warmer than the thirty-year average, SSE said.
Lower expectations: SSE is expecting its first quarter profits to come in around £80million lower than forecast
Heatwave: The temperature in the UK during the three months to 30 June was 1.5 degrees centigrade warmer than the thirty-year average, SSE said
The group warned that the first quarter knock to underlying earnings could affect its annual results, depending on how market conditions shape up for the rest of the year.
SSE’s latest earnings troubles come follow a challenging previous financial year, which saw the group’s pre-tax profits fall 6 per cent to £1.45billion, while bottom-line profits fell 39 per cent to £1.09billion.
The comapany, which is one of Britain’s ‘Big Six’ energy providers, lost 430,000 customers in the last year and was stung by charges linked to the merger of its retail arm with rival Npower.
In its first-quarter update, SSE said it remained on track to complete the Npower deal by the end of its current financial year.
The group became the last Big Six provider to hike bills in May, announcing that electricity and gas bills will rise by an average of 6.7 per cent, or £76 per year, in a move affecting 2.36 million customers.
The group’s share price is down 3.05 per cent or 42.25p to 1,342p following the update.