TIDMSSE
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 GBP2.5bn 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 GBP2.5bn. 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 GBP3.6bn RIIO-ED2
business plan following Ofgem's recent final determination, which
saw baseline allowances for SSEN Distribution increasing by GBP300m
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 GBP12.5bn 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 % of Planned output Actual output
for 9 months planned for 9 months for 9 months
to 31 December output to 31 December to 31 December
2022 2022 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
SSE Investor Sally Fairbairn, +44 (0)345 0760
Investors Relations ir@sse.com Michael Livingston 530
Sam Peacock, +44 (0)345 0760
Media SSE Media media@sse.com Glenn Barber 530
+44 (0)7885 224
532
Oliver Hughes +44 (0)7709 496
MHP Communications Simon Hockridge 125
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