StockMarketWire.com - SSE expected to report a "significant reduction" in its Wholesale business operating profit for 2018/2019 and was continuing to examine future options for its SSE Energy Services, the energy supplier said in an update ahead of its full-year results in May.

This decrease from 2017/2018 levels reflected the previously communicated losses incurred in EPM, the cessation of power purchase agreements and a lower hedged price for renewable energy output.

Its Networks business, meanwhile, would see a mid-single digit percentage increase in operating profit, while the Business Energy, SSE Airtricity and Enterprise arm would be "broadly flat".

"This year has clearly presented significant challenges and uncertainty in the operating environment persists, but our optionality and agility mean we are well placed to deliver on the strategy we presented last year to create value for shareholders and society from developing, owning and operating energy and related infrastructure in a sustainable way, as well as delivering against our five-year dividend plan," said SSE Finance Director Gregor Alexander.

The company said it expected to deliver a full-year dividend of 97.5p per share for 2018/2019 and still anticipated a dividend of 80p per share for 2019/20, in line with its dividend plans outlined in May 2018.

For 2018/19, adjusted earnings per share would be in the range of 64-69p while cash proceeds from disposals would exceed £1bn.

The company's SSE Energy Services arm, meanwhile, was expected to be profitable and cash-flow positive (excluding working capital movements) in 2018/19 and 2019/20.

Within this, in FY18/19 its household Energy Supply Business was still expected to report an adjusted operating margin of 2-3% compared to 6.8% in the previous year, reflecting the introduction of the Default Tariff Cap and lower customer numbers.

Work on the future options for SSE Energy Services, set out in SSE's third-quarter trading statement on 8 February, was continuing, including progress on potential external collateral arrangements that may support the opportunities for a future outside the SSE Group. Should these options not be viable, SSE would expect to retain Energy Services as a separate entity within the SSE Group. SSE said it intended to provide an assessment of the preferred option by the end of May 2019.







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