SSE has announced that Covid-19 has had an estimated £170m impact on its operating profits.
Despite this, the multinational energy company has recorded operating profits of £1.5bn in 2020/21, a 7% increase compared to the £1.4bn it generated in 2019/20.
In its primary results, the firm’s most profitable vertical was SSE Renewables - which recorded an adjusted operating profit of £731.8m, a 29% increase when compared to the £567.3m it made in 2019/20.
Its Scottish and Southern Electricity Networks (SSEN) Distribution saw the company’s biggest profit decrease, dropping by 25%, going from £356.3m in 2019/20 to £267.3m in 2020/21.
The firm’s adjusted net debt and hybrid capital went down in 2020/21 when compared to 2019/20, going from £10.4bn to £8.8bn. This reflects its ongoing disposal programme and debt revaluation adjustments, which was partially offset by the ongoing capital investment programme and working capital movements including the impact from Covid-19.
Commenting on the results, SSE chairman Sir John Manzoni said: “We have made significant progress on our non-core disposals programme, creating value for shareholders while continuing to to sharpen the group’s strategic focus on its low carbon electricity core in networks and renewables, where our capital investment programme is progressing well.
“Looking ahead, a strong balance sheet, underpinned by world-class assets, gives us a firm footing from which to capitalise on the considerable future growth opportunities we are creating in the transition to net zero.”
Going forward, SSE remains committed to its five-year dividend plan to March 2023. And, while it’s not providing full guidance for 2021/22 at this stage, it expects the ongoing impact of Covid-19 to be mainly restricted to the performance of its Enterprise and Business Energy verticals.
The firm is also still committed to delivering its £7.5bn capital investment plan to 2025. As part of this work, SSE has announced it’s looking to invest around £2bn into largely low carbon power projects this year. This is part of its ambition to reach a run rate of at least one gega-watt of new assets a year during the second half of the decade.
Alistair Phillips-Davies, SSE chief executive, said: “This is a pivotal year for the planet in our fight against climate change and as a principal partner of COP26, we are supporting the UK government’s efforts to drive more urgent and ambitious climate action.
“At the same time we are focused on ensuring equitable social outcomes from the net zero transition; and through our investment programme we are building projects that will not only help tackle climate change but will create green jobs and revitalise communities along the way.”
SSE has also confirmed it expects to kickstart a sale process for all of its 33% stake in gas network operator SGN during mid-summer 2021, which it hopes will be concluded before the end of the calendar year.