Energy giant takes on Labour over price freeze pledge: we lose money on bills

 

SSE, the country’s second-biggest energy supplier, yesterday added fuel to the controversy over Labour leader Ed Miliband’s plan to freeze prices by declaring that its retail division made a loss in the six months just ended.

But the firm made it clear that investors would not suffer, and it still plans to increase its dividend by more than inflation. George Alexander, the finance director, said: “Despite the intensifying political debate, we will maintain our operational and financial discipline to enable us to deliver an above-inflation increase in the dividend for this financial year and beyond.”

SSE warned that its first-half adjusted pre-tax profit was likely to be lower than last year’s because of rising wholesale gas prices, higher distribution costs and lower demand.

It emphasised that although the retail business had fallen into the red in the first half, it still expected profits in its wholesale and network divisions. Analysts said they expected SSE to make much of the domestic energy market losses in the wake of Labour’s threats to control prices.

The firm said first-half retail losses “should have no implications for the full financial year” although it could not provide a full-year profit outlook until it reports on its third quarter in January. The shares were up 6p yesterday at 1474p.

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