REG - SSE Plc - Q3 Trading Statement

SSEAnnouncement

20/01/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230120:nRST3324Na&default-theme=true

RNS Number : 3324N  SSE PLC  20 January 2023

This announcement contains inside information under Article 7 of the Market
Abuse Regulation (EU) No 596/2014, as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 ("UK MAR").

 

SSE plc

q3 trading statement

20 January 2023

 

·    2022/23 adjusted earnings per share expectations updated to more than
150 pence.

·    Update reflects the strength of the Group's diverse business mix,
which continues to create value, alongside the increased certainty from strong
operational performance and supportive market conditions.

·    SSE remains on course to deliver record investment in excess of
£2.5bn this year, backed by its strong balance sheet and credit ratings, with
clear visibility of further investment opportunities that support the
transition to net zero.

 

This Trading Statement updates SSE's financial outlook, outlines operational
performance for the third quarter ending 31 December 2022 and highlights
recent strategic progress made in the delivery of the Group's Net Zero
Acceleration Programme ("NZAP").

 

financial outlook

SSE is updating its current expectations for full-year 2022/23 adjusted
earnings per share to more than 150 pence from the previous guidance of at
least 120 pence. This update reflects the strength and stability of its
balanced mix of regulated and market-facing businesses with continuing good
availability and supportive market conditions leading to flexible generation
plant and gas storage optimisation significantly offsetting lower than planned
renewables output and hedge buy-back costs. It also reflects a narrower range
of probable financial outcomes with the decrease in risk from recent falls in
forward power and gas prices and further clarity over the Electricity
Generator Levy both reducing uncertainty in the financial outlook as the year
has progressed.

With market volatility expected to continue in the near term, uncertainties
such as plant availability, weather conditions, and the extent to which market
conditions lead to further optimisation of flexible generation plant, will
determine the final full-year outturn. SSE will provide an update on
performance for the final months of the year in its Notification of Closed
Period statement.

In line with the Group's five-year dividend plan, announced as part of its
NZAP in November 2021, SSE intends to recommend a full-year dividend of 85.7p
per share plus RPI for 2022/23 followed by a rebase to 60p in 2023/24 to
support the Group's significant investment and growth plans. The dividend is
then expected to increase by at least 5% per annum in 2024/25 and 2025/26.

SSE remains on course to deliver record investment in 2022/23, with capital
expenditure (including acquisitions) still expected to be in excess of
£2.5bn. Investment opportunities associated with net zero continue to
accelerate, not least in SSE's regulated networks businesses. December's
Accelerated Strategic Transmission Investment (ASTI) framework announcement
clears the way for SSEN Transmission to build the assets required to support
50GW of offshore wind by 2030 and work continues on agreeing a final
settlement for SSEN Distribution to implement its £3.6bn RIIO-ED2 business
plan following Ofgem's recent final determination, which saw baseline
allowances for SSEN Distribution increasing by £300m from draft
determinations, representing a 21% increase in allowed expenditure compared to
an equivalent period in RIIO-ED1.

The Group's balance sheet continues to strengthen and, following the
completion of a minority stake sale of SSEN Transmission in November 2022, the
net debt to EBITDA ratio is anticipated to be well below the target 4.5 times
for this financial year. At 18 January 2023, c.23% of available liquidity had
been utilised on cash collateral for forward commodity contracts.

Gregor Alexander, Finance Director, said:

"Our fully funded £12.5bn Net Zero Acceleration Programme is progressing at
pace as we build the renewables, networks and flexible energy assets needed
for a cleaner, more secure energy system.

"SSE is performing well in a shifting and volatile energy landscape,
underlining the strength of our balanced business mix and the quality of our
assets, and we are well placed to deliver a strong financial performance for
the full year.

"We are responding to the cost of living and energy crises by investing record
amounts and remain committed to investing additional profit we make into
critical low-carbon electricity infrastructure. By doing so, we are creating
lasting value for SSE's stakeholders, and society as a whole."

Q3 PERFORMANCE & Operational Update

 

SSE Renewables

Output of electricity from renewable sources in which SSE has an ownership
interest across the UK and Ireland was 0.76TWh, or around 10%, below plan in
the nine months to 31 December 2022 but 0.94TWh higher than the equivalent
period last year. The third quarter has continued to see periods of
unseasonably calm and dry weather with delays to the Seagreen project also
contributing to the shortfall against plan.

 

Construction on Seagreen continues, alongside Dogger Bank and Viking, with
Seagreen still expected to be completed in summer 2023 assuming normal weather
and planned vessel availability.

 

                                                                    Actual output for 9 months to 31 December 2022  % of planned output  Planned output for 9 months to 31 December 2022  Actual output for 9 months to 31 December 2021
 Onshore wind generation output - GWh inc. constrained off output   3,458                                           96%                  3,586                                            2,791
 Offshore wind generation output - GWh inc. constrained off output  1,328                                           78%                  1,692                                            1,099
 Conventional hydro generation output - GWh                         2,074                                           88%                  2,345                                            2,030
 Total renewables output (excl. pumped storage) - GWh               6,860                                           90%                  7,623                                            5,920
 Pumped storage generation output - GWh                             205                                             -                    -                                                156
 Total renewables output - GWh                                      7,065                                           -                    -                                                6,076

1.    Output based on equity share and in the nine months to 31 December
2022 includes 341GWh of onshore and 97GWh of offshore compensated constrained
off generation. The same period in 2021 included 268GWh of onshore, and 118GWh
offshore, compensated constrained off generation.

2.     Planned output is consistent with the 11.4TWh outlook for 2022/23
as stated in May 2022, which included 0.9TWh of planned output from Seagreen
during the period.

 

SSE Thermal
Flexible thermal generation continues to play a key part in the transition to
net zero, creating value by optimising output and forward trading to reflect
market conditions and providing the fast response services required in an
increasingly intermittent renewables-led system. Strong availability across
the existing fleet during the last quarter, combined with market conditions,
has meant output of electricity from SSE's gas-fired generation plant for the
nine months to 31 December 2022 was 27% higher than the same period last year
as SSE's fleet helped ensure security of supply for customers.

Meanwhile, commissioning of Keadby 2 CCGT is due to recommence on 22 January
with the performance validation period continuing to be expected to complete
on 11 February 2023.

                                          9 months to        9 months to

                                          31 December 2022   31 December 2021
 Gas-fired generation output (GB) - GWh   13,232             8,670
 Gas-fired generation output (ROI) - GWh  1,018              2,517
 Total gas-fired generation output - GWh  14,250             11,187

1.    Output includes 311GWh of oil-fired generation in the nine months to
31 December 2022 and 642GWh of oil-fired generation in the same period in
2021, primarily older Irish plant.

2.     In September 2021 SSE's offtake agreement for 100% of output from
its Seabank CCGT JV expired, with output following that date only recognised
to the extent of its 50% equity share.

3.    Output in GB includes 1,012GWh of output from the Triton Power
portfolio from acquisition on 1 September 2022. The output primarily relates
to the Saltend CCGT.

4.    Output in Ireland in the nine months to 31 December 2022 was impacted
by unavailability at Great Island CCGT, which returned to service in July
2022, and Tarbert oil-fired plant.

5.     Output in GB excludes 649GWh of commissioning output in 2022 from
Keadby 2 CCGT, with the plant's performance validation period expected to
complete on 11 February 2023.

 

Notification of CLoseD Period

SSE expects to issue a Notification of Closed Period statement on 30 March
2023 ahead of publication of its Preliminary Full-year Results for 2022/23 on
24 May 2023.

 

 Enquiries
 Investors  SSE Investor Relations  ir@sse.com (mailto:ir@sse.com)        Sally Fairbairn, Michael Livingston  +44 (0)345 0760 530
 Media      SSE Media               media@sse.com (mailto:media@sse.com)  Sam Peacock,                         +44 (0)345 0760 530

                                                                          Glenn Barber

            MHP Communications                                            Oliver Hughes                        +44 (0)7885 224 532

                                                                          Simon Hockridge                      +44 (0)7709 496 125

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTMZGMMMLLGFZZ