Energy giant SSE delivers 3.2% increase in interim dividend payment to investors weeks after announcing a hike in household bills
Group blames £115.4m loss onrising costs of wholesale energy, environmental and social policies
Energy giant SSE insisted it was battling “difficult” energy market conditions as it revealed a £115.4 million loss in its retail supply business just weeks after announcing a hike in household bills.
The group, which has more than nine million customers and is the UK's second largest generator of electricity, blamed the performance on rising costs of wholesale energy, environmental and social policies and distribution.
Its overall underlying group profits fell 11.7 per cent to £354 million in the six months to September 30, but SSE delivered a 3.2 per cent increase in its interim dividend payment to investors and pledged to hand out above inflation increases in its full year dividend, claiming this was vital to ensure the group is able to raise enough money to fund spending on its network.
SSE was the first of the major suppliers to announce a tariff rise, saying last month that it would lift prices by an average of 8.2 per cent from Friday.
The first half loss in its retail supply arm compares with a £48.3 million operating profit a year earlier.
It comes as SSE - which trades as Southern Electric, Swalec and Scottish Hydro - also revealed falling electricity and gas consumption in the half year, down 3 per cent and 1.7 per cent respectively on average with weather effects stripped out.
The group's customer numbers also dropped by 60,000 to 9.41 million since the end of March.
Lord Smith of Kelvin, chairman of SSE, said: "Energy market conditions generally have been difficult for some time."
The group sought to deflect criticism over its move to pay shareholder dividends while raising prices for consumers.
Will Morris, group managing director of SSE's retail business, said: "Some politicians and media commentators have claimed recently that we value our shareholders more than our customers.
"Or to put it another way, we're focussed on paying them a dividend on their shares, regardless of what that means for our customers.
"Nothing could be further from the truth."
He added: "Without the investment made by shareholders, we couldn't afford to build the infrastructure or buy the equipment needed to deliver what customers need."
Rising gas and electricity bills have dominated the political agenda in recent weeks after five of the "big six" suppliers have upped tariffs.
EDF Energy said yesterday it was increasing prices by 3.9 per cent in January, but this was far lower than many of its rivals as the group said it would not pass on costs of Government green levies in anticipation of changes to how these schemes are paid for.
SSE chief executive Alistair Phillips-Davies called for the levies to be paid for by general taxation, which he said would reduce bills by £110 immediately.
The group vowed to reduce its bills if the levies were cut, telling BBC Radio 5 Live that prices would definitely come down as a result, "no ifs, no buts".
SSE's retail division contributes around 13 per cent of the overall company's results, with the rest coming from its energy networks and generation capacity.
Including one-off items, the group reported pre-tax profits of £336.4 million for the half-year.
The group said it deployed more than 1,100 engineers and support staff to make repairs after last month's St Jude's storm when around 110,000 of its customers were left without power.
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