REG - SSE Plc - Half Yearly Report <Origin Href="QuoteRef">SSE.L</Origin> - Part 6
12/11/2014 08:01
- Part 6: For the preceding part double click ID:nRSL7750We
Total 12,413.9 2,042.7 14,456.6
Revenue from the Group's investment in Scotia Gas Networks Limited, the Group's share being £269.4m (September 2013-
£265.2m, March 2014 - £535.0m), is not recognised as revenue of the Group under equity accounting.
Notes on the Condensed Interim Statements
for the period 1 April 2014 to 30 September 2014
6. Segmental information (continued)
a) Revenue by segment (continued)
Restated (Note 3,4) Year ended 31 March 2014
External revenue Intra-segment revenue Total revenue
£m £m £m
Networks
Electricity Distribution 704.1 311.7 1,015.8
Electricity Transmission 185.2 - 185.2
889.3 311.7 1,201.0
Retail
Energy Supply 8,465.0 26.7 8,491.7
Enterprise 451.1 143.6 594.7
Energy-related Services 106.5 112.0 218.5
9,022.6 282.3 9,304.9
Wholesale
Energy Portfolio Management and Electricity Generation 20,608.5 4,246.0 24,854.5
Gas Storage 9.0 82.6 91.6
Gas Production 7.8 255.7 263.5
20,625.3 4,584.3 25,209.6
Corporate unallocated 47.8 276.0 323.8
Total 30,585.0 5,454.3 36,039.3
b) Operating profit by segment
Six months ended 30 September 2014
Adjusted operating profit reported to the Board Joint Venture/ Associate share of interest and tax (i) Before exceptional items andcertain re-measurements Exceptional items andcertain re-measurements Total
£m £m £m £m £m
Networks
Electricity Distribution 215.7 - 215.7 - 215.7
Electricity Transmission 98.9 - 98.9 - 98.9
Gas Distribution 143.8 (81.0) 62.8 2.2 65.0
458.4 (81.0) 377.4 2.2 379.6
Retail
Energy Supply (16.9) - (16.9) - (16.9)
Enterprise 42.9 - 42.9 - 42.9
Energy-related Services 11.3 - 11.3 - 11.3
37.3 - 37.3 - 37.3
Wholesale
Energy Portfolio Management and Electricity Generation 11.8 (9.7) 2.1 (10.5) (8.4)
Gas Storage 1.6 - 1.6 - 1.6
Gas Production 13.3 - 13.3 - 13.3
26.7 (9.7) 17.0 (10.5) 6.5
Corporate unallocated 7.4 - 7.4 - 7.4
Total 529.8 (90.7) 439.1 (8.3) 430.8
Notes on the Condensed Interim Statements
for the period 1 April 2013 to 30 September 2014
6. Segmental information (continued)
b) Operating profit by segment (continued)
Restated (Notes 3, 4) Six months ended 30 September 2013
Adjusted operating profit reported to the Board Joint Venture/ Associate share of interest and tax (i) Before exceptional items and certain re-measurements Exceptional items and certain re-measurements Total
£m £m £m £m £m
Networks
Electricity Distribution 232.0 - 232.0 - 232.0
Electricity Transmission 67.6 - 67.6 - 67.6
Gas Distribution 138.2 (85.8) 52.4 65.5 117.9
437.8 (85.8) 352.0 65.5 417.5
Retail
Energy Supply (115.4) - (115.4) - (115.4)
Enterprise 27.8 (0.1) 27.7 - 27.7
Energy-related Services 16.2 - 16.2 - 16.2
(71.4) (0.1) (71.5) - (71.5)
Wholesale
Energy Portfolio Management and Electricity Generation 86.2 (9.9) 76.3 (11.8) 64.5
Gas Storage 5.2 - 5.2 - 5.2
Gas Production 69.0 - 69.0 69.0
160.4 (9.9) 150.5 (11.8) 138.7
Corporate unallocated (8.1) - (8.1) - (8.1)
Total 518.7 (95.8) 422.9 53.7 476.6
Restated (Notes 3, 4) Year ended 31 March 2014
Adjusted operating profit reported to the Board Joint Venture/ Associate share of interest and tax (i) Before exceptional items andcertain re-measurements Exceptional items andcertain re-measurements Total
£m £m £m £m £m
Networks
Electricity Distribution 507.0 - 507.0 (7.1) 499.9
Electricity Transmission 136.7 - 136.7 (1.0) 135.7
Gas Distribution 276.6 (163.1) 113.5 68.9 182.4
920.3 (163.1) 757.2 60.8 818.0
Retail
Energy Supply 246.2 - 246.2 (43.2) 203.0
Enterprise 56.8 (0.1) 56.7 (42.3) 14.4
Energy-related Services 24.1 - 24.1 (48.5) (24.4)
327.1 (0.1) 327.0 (134.0) 193.0
Wholesale
Energy Portfolio Management and Electricity Generation 496.1 (8.1) 488.0 (607.4) (119.4)
Gas Storage 8.3 - 8.3 (137.7) (129.4)
Gas Production 130.2 - 130.2 - 130.2
634.6 (8.1) 626.5 (745.1) (118.6)
Corporate unallocated (1.9) - (1.9) (14.1) (16.0)
Total 1,880.1 (171.3) 1,708.8 (832.4) 876.4
(i) The adjusted operating profit of the Group is reported after removal of the Group's share of interest, fair value
movements on financing derivatives and tax from joint ventures and associates and after adjusting for exceptional items and
certain re-measurements (note 7). The share of Scotia Gas Networks Limited interest includes loan stock interest payable to
the consortium shareholders. The Group has accounted for its 50% share of this, £16.7m (2013 - £16.7m, March 2014 -
£33.3m), as finance income (note 8).
Notes on the Condensed Interim Statements
for the period 1 April 2014 to 30 September 2014
7. Exceptional items and certain re-measurements
Yearended 31March2014£m(Restated Note 3) Six months ended 30 September 2014 Six months ended 30 September
£m 2013
£m
(Restated Note 3)
Exceptional items
(574.9) Asset impairments and related charges (i) - -
(137.4) Provisions for restructuring and other liabilities (ii) - -
(34.9) Impairment of investments in associates (share of result, net of tax) - -
63.3 Share of effect of change in UK corporation tax rate on net deferred tax liabilities of joint venture and associate investments (iii) - 64.7
(683.9) - 64.7
Certain re-measurements (ii)
(150.9) Movement on operating derivatives (note 17) (10.5) (11.8)
(64.2) Movement on financing derivatives (note 17) (9.7) (31.3)
2.4 Share of movements on derivatives in joint ventures (net of tax) 2.2 0.8
(212.7) (18.0) (42.3)
(896.6) Impact on (loss)/profit before taxation (18.0) 22.4
Exceptional items
59.8 Effect of change in UK corporation tax rate on deferred tax liabilities and assets (iii) - 108.4
137.3 Taxation on exceptional items - -
197.1 - 108.4
Certain re-measurements (ii)
63.7 Taxation on certain re-measurements 4.2 9.9
260.8 Taxation 4.2 118.3
(635.8) Impact on (loss)/profit for the period/year (13.8) 140.7
(i) Exceptional items
In the previous financial year, the Group recognised exceptional charges arising from and related to asset impairments of
£574.9m. This consisted of impairment charges in respect of thermal and renewable generation plant of £363.9m which
included the impact of the decision to scale back the Group's involvement in certain offshore wind developments. The total
also included impairment charges against gas storage facilities of £137.7m and charges of £73.3m in relation to recognition
of losses and costs arising from the decision to exit from certain non-core businesses following the announcement of its
restructuring and disposal programme on 26 March 2014. This latter item also includes impairment charges of £36.2m in
relation to system and software development across the energy supply and metering businesses.
Other exceptional charges of £137.4m were recognised in the previous financial year. This included charges of £91.0m in
relation to the March 2014 restructuring announcement, including a restructuring provision primarily relating to the scheme
of employee voluntary early release of £52.9m and provisions associated with business closures and contractual disputes of
£38.1m. Also included in this total is a provision of £46.4m for the settlement of a contractual dispute.
(ii) Certain re-measurements
Certain re-measurements arising from IAS 39 are disclosed separately to aid understanding of the underlying performance of
the Group. This category includes the movement on derivatives (and hedged items) as described in note 17. Only certain of
the Group's energy commodity contracts are deemed to constitute financial instruments under IAS 39. As a result, while the
Group manages the commodity price risk associated with both financial and non-financial commodity contracts, it is only
commodity contracts that are designated as financial instruments under IAS 39 that are accounted for on a fair value basis
with changes in fair value reflected in the income statement (as part of 'certain re-measurements') or in equity.
Conversely, commodity contracts that are not financial instruments under IAS 39 are accounted for as 'own use' contracts.
(iii) Change in UK corporation tax rates
The 2013 Budget on 20 March 2013 announced that the UK corporation tax rate will reduce to 20% by 2015. A reduction in the
rate from 24% to 23% (effective from 1 April 2013) was substantively enacted on 3 July 2013 and substantive enactment of
the rates of 21% and 20% with effect from 1 April 2014 and 1 April 2015, respectively, took place on 3 July 2013. All
substantively enacted changes had been recognised in periods up to 31 March 2015 and no further impact was recognised in
the period to 30 September 2014.
Notes on the Condensed Interim Statements
for the period 1 April 2014 to 30 September 2014
7. Exceptional items and certain re-measurements (continued)
The changes recognised in previous periods had the effect of reducing the Group's net deferred tax liabilities recognised
at 31 March 2014 and 30 September 2014 by £33.6m and £83.4m respectively (with an income statement impact of £59.8m and
£108.4m respectively) and the Group's share of associate and jointly controlled investment deferred tax liabilities by
£64.7m and £63.3m respectively.
8. Net finance costs
Yearended31 March2014Restated(note 3) Six months ended 30 September 2014 Six months ended 30 September 2013Restated(note 3)
£m £m £m
Finance income:
1.7 Interest income from short term deposits 0.8 0.9
19.3 Foreign exchange translation of monetary assets and liabilities - 19.8
Other interest receivable:
33.3 Scotia Gas Networks loan stock 16.7 16.7
11.7 Other joint ventures and associates 7.0 6.5
56.7 Other receivable 25.2 25.2
101.7 48.9 48.4
122.7 Total finance income 49.7 69.1
Finance costs:
(18.5) Bank loans and overdrafts (10.7) (8.0)
(310.8) Other loans and charges (138.4) (162.4)
(26.8) Interest on net pension scheme liabilities (13.0) (13.6)
(9.5) Notional interest arising on provisions (5.3) (3.9)
(35.7) Finance lease charges (17.1) (17.9)
58.9 Less: interest capitalised 30.3 28.8
(342.4) Finance costs excluding movement on financing derivatives and exceptional items (154.2) (177.0)
(64.2) Movement on financing derivatives and exceptional items (9.7) (31.3)
(283.9) Net finance costs (114.2) (139.2)
Adjusted net finance costs are arrived at after the following adjustments:
Yearended31 March2014Restated(note 3) Six months ended 30 September 2014 Six months ended 30 September 2013 Restated(note 3)
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