SSE PLC: interim results
for six months ended 30 September 2024
13 November
2024
DELIVERING MISSION CRITICAL
INVESTMENT
· Strong start to financial
year, delivering adjusted earnings per share of
49.8p, in line with
expectations:
§ Value creating investment helping
to drive increased contribution from electricity networks and
renewables which delivered over 95% of half year adjusted operating
profits.
§ Balanced business mix provided
resilience, as return to favourable weather conditions meant
increased SSE Renewables profitability offset lower SSE Thermal
contribution.
§ Strong Balance Sheet, with 94% of
debt fixed at average cost of 4.0%.
§ Interim dividend of 21.2p
declared, reflecting an increase of 6% on prior year.
· Reached mid-point of
five-year clean power investment programme delivering world-class
assets:
§ £1.3bn invested in first half,
with ~90% invested across electricity networks and
renewables.
§ Completion of £1bn+ combined
investment in 443MW Viking onshore wind farm in Shetland and
associated subsea HVDC transmission cable, connecting the islands
to the GB grid for the first time.
§ Continue to progress turbine
installations on Dogger Bank offshore wind farm, completion
expected in the second half of 2025 with equity returns remaining
comfortably above hurdle rates.
§ Construction commenced on £4.3bn
Eastern Green Link 2 Joint Venture, the UK's single largest
electricity transmission project.
· Expectations unchanged for
full year adjusted operating
profits:
§ Increasing electricity networks
contribution as inflation catch-up in Distribution more than
offsets lower Transmission profits due to economically neutral
capex tax relief, which is netted off revenue.
§ Increasing renewables
contribution, as capacity additions and higher hedged prices come
through.
§ Thermal and Gas Storage
profitability of around £200m reflecting stable market
conditions.
§ Adjusted Earnings Per Share
guidance for 2024/25 to be provided later in the financial
year.
· Group remains on track to
deliver 2026/27 adjusted earnings per share of between 175 -
200p.
|
FINANCIAL
SUMMARY
|
Adjusted
|
Reported
|
|
|
|
Sep 2024
|
Sep 2023
|
% mvmt
|
Sep 2024
|
Sep
20231
|
% mvmt
|
|
Operating profit (£m)
|
860.2
|
693.2
|
24.1%
|
902.8
|
644.3
|
40.1%
|
|
Profit before tax (£m)
|
714.5
|
565.2
|
26.4%
|
845.9
|
615.3
|
37.5%
|
|
Earnings per share (p)
|
49.8
|
37.0
|
34.6%
|
47.7
|
30.7
|
55.4%
|
|
Investment, capital & acquisitions (£m)
|
1,292.1
|
1,054.3
|
22.6%
|
1,573.3
|
1,320.4
|
19.2%
|
|
Net
Debt and Hybrid Capital (£bn)2
|
(9.8)
|
(8.9)
|
10.1%
|
(8.7)
|
(8.1)
|
7.4%
|
|
|
|
|
|
|
|
| |
1Prior period reported
figures have been restated, for further details see note 2(v) to
the Interim Financial Statements
2Reported net debt excludes
equity accounted hybrid capital, for full reconciliation to
adjusted net debt see Alternative Performance Measures section of
Interim Financial Statements
Alistair Phillips-Davies,
Chief Executive, said:
"This is a strong set of
interim results including delivery of higher-quality earnings and
the mission-critical infrastructure that shows SSE is at the heart
of the clean energy transition.
"We are encouraged by the
increasing attractiveness of our main markets and our alignment
with the new UK Government's mission to achieve Clean Power by
2030.
"SSE will be a key delivery
partner with our ~£20bn investment programme and the scale and
quality of our project pipeline that spans renewables, electricity
networks and flexible power plants - which will all be required to
make clean power a reality.
"Our unique position gives
us exceptional growth opportunities and clear targets that will
deliver long-term value to shareholders and
society."
highlights: Delivering ON
OUR INVESTMENT
· Financial performance in
line with expectations, reflecting strong operational
delivery
§ Adjusted earnings per share of
49.8p, in line with expectations and reflecting lower level of
seasonality given upweighted earnings contribution from regulated
electricity networks businesses.
§ Reported earnings per share of
47.7p also reflects positive fair value movements on derivatives
offset by an increase in Deferred Tax driven by capital allowances
on an accelerating capital investment programme.
§ Electricity networks adjusted
operating profits increased by 50% on prior period, as expected
lower revenue in Transmission was more than offset by multi-year
inflation catch-up through Distribution tariffs.
§ Renewables adjusted operating
profit increased by 3.9 times on prior period, as combination of
1GW+ increase in operating capacity and return to favourable
weather conditions drove ~45% increase in output with
long-established hedging approach providing ~30% increase in hedged
prices.
§ Thermal and Gas Storage adjusted
operating losses impacted by more stable market environment, partly
driven by return to Renewables-favourable weather conditions over
the period.
§ SSEN Transmission successfully
launched in August 2024 its debut issuance in the Euro bond market
with a €850m 8-year Green Bond at an all-in fixed funding cost of
4.95%. In October 2024, both SSE and SSEN Transmission replaced
existing revolving credit facilities with new sustainability linked
facilities totalling £3.0bn gross.
§ Adjusted investment, capital and
acquisition expenditure of £1.3bn, with ~90% focused on clean power
infrastructure across electricity networks and
renewables.
§ Adjusted net debt and hybrid
capital at £9.8bn, in line with expectations, with strength of
balance sheet maintained alongside the strong investment grade
credit rating.
· Mid-point in five-year
~£20bn clean power Net Zero Acceleration Programme
Plus
§ Full energisation of Shetland HVDC
link - a 260km subsea transmission cable that connects the islands
to the GB energy grid for the first time - and completion of
associated 443MW Viking wind farm both delivered in August 2024,
representing an investment of over £1bn.
§ Construction commenced on Eastern
Green Link 2 (EGL2), a 2GW subsea HVDC project being delivered in
partnership with National Grid, which is the UK's single largest
electricity transmission project transporting enough electricity to
power two million UK homes. EGL2 was the first project to receive
"fast track" approval through Ofgem's Accelerated Strategic
Transmission Investment (ASTI) framework.
§ SSEN Transmission is continuing
progress on remaining Large Onshore Transmission Investments (LOTI)
and ASTI projects, receiving final consents for Argyll and Kintyre
275kV upgrade and commencing construction on £900m+
Orkney-Caithness link.
§ Major projects under way within
SSEN Distribution, with framework agreements worth £1.3bn+ having
been agreed with delivery partners and over 750MW of distributed
flexibility procured under the business plan.
§ Continuing to progress 3.6GW
Dogger Bank offshore wind farm which, when complete, will be the
world's largest offshore wind farm. With turbine installation
ongoing on Dogger Bank A but the winter months fast approaching,
completion is expected in the second half of 2025. Monopile and
transition piece installation on Dogger Bank B continues to make
good progress, with procurement of a second turbine installation
vessel under way. Despite slower than expected progress on turbine
installation, equity returns across all three phases remain
comfortably above hurdle rates.
§ Completion of the Tummel Bridge
hydro-electric power station refurbishment, investing £50m to
increase capacity potential to 40MW whilst also extending the
plant's working life by at least 40 years.
§ Success in the UK sixth Contract
for Difference auction (AR6) with 130MW Cloiche onshore wind farm
and in Ireland's fourth Renewable Electricity Support Scheme
auction (RESS 4) with 60MW Drumnahough onshore wind farm Joint
Venture.
§ Entered commercial operations on
55MW Slough Multifuel, a Joint Venture with CIP, ahead of schedule.
The facility is expected to process around 480,000 tonnes of
residual waste each year, backed by a 15 year capacity contract,
with steam produced being re-used on the Slough Trading
Estate.
§ Progress made in selected
international markets with ~100MW onshore wind under construction
across Spain, France and Italy and auction success in the
Netherlands with 2GW Ijmuden Ver Alpha offshore wind farm Joint
Venture.
Key Performance
Indicators
|
Financial
Performance
|
Adjusted
|
Reported
|
|
|
Sep 2024
|
Sep 2023
|
Sep 2024
|
Sep
20231
|
|
Operating profit
£m
|
860.2
|
693.2
|
902.8
|
644.3
|
|
EBITDA £m
|
1,323.0
|
1,109.6
|
1,290.7
|
987.9
|
|
Profit before tax
£m
|
714.5
|
565.2
|
845.9
|
615.3
|
|
Earnings per share (EPS)
pence
|
49.8
|
37.0
|
47.7
|
30.7
|
|
|
|
|
|
|
|
Interim dividend per share
(DPS) pence
|
21.2
|
20.0
|
21.2
|
20.0
|
|
|
|
|
|
|
|
Investment, capital and
acquisitions £m
|
1,292.1
|
1,054.3
|
1,573.3
|
1,320.4
|
|
|
|
|
|
|
|
Net debt and hybrid capital
£m
|
9,843.8
|
8,943.8
|
8,688.8
|
8,050.6
|
|
|
|
|
|
|
|
SSEN
Transmission RAV - £m (100% basis)
|
6,359
|
5,289
|
|
SSEN
Distribution RAV - £m
|
5,528
|
5,138
|
|
SSE Total Electricity
Networks RAV - £m (100% basis)
|
11,887
|
10,427
|
|
|
|
|
|
| |
1Prior period reported
figures have been restated, for further details see note 2(v) to
the Interim Financial Statements
|
Performance against 2030
Goals
|
Sep 2024
|
Mar 2024
|
Sep 2023
|
|
Cut carbon intensity by
80%
|
|
|
|
|
- Scope 1 GHG intensity (gCO2e/kWh)
|
207
|
205
|
232
|
|
Increase renewable energy
output fivefold
|
|
|
|
|
- Renewable generation output
(TWh)1
|
5.4
|
11.2
|
3.8
|
|
Enable low-carbon generation
and demand
|
|
|
|
|
- Renewables connected in SSEN Transmission network
area (GW)2
|
10.6
|
9.3
|
9.2
|
|
Champion a fair and just
energy transition
|
|
|
|
|
- Contribution to GDP UK and Ireland (£bn /
€bn)3
|
-
|
5.96/1.06
|
-
|
|
- Jobs supported in UK and
Ireland2
|
-
|
53,230/3,270
|
-
|
1 Includes SSE Renewables
total output inc. pumped storage, battery, and constrained off wind
in GB, as well as biomass asset in Enterprise
2 Transmission and
distribution connected capacity within the SSEN Transmission
Network area, includes pumped storage and battery
storage
3 Direct, indirect and
induced Gross Value Added and jobs supported, from PwC
analysis
|
Safety
Performance
|
Sep 2024
|
Mar 2024
|
Sep 2023
|
|
Total
Recordable Injury Rate per 100k hours worked (SSE &
contractors)
|
0.16
|
0.20
|
0.24
|
Investor
Timetable
|
Interim ex-dividend date
|
2
January 2025
|
|
Record date
|
3
January 2025
|
|
Scrip
reference pricing days
|
2-8
January 2025
|
|
Scrip
reference price confirmed and released via RNS
|
9
January 2025
|
|
Q3
Trading Statement
|
Around 31 January 2025
|
|
Final
date for receipt of scrip elections
|
31
January 2025
|
|
Interim dividend payment date
|
27
February 2025
|
|
Notification of Closed Period
|
Around 31 March 2025
|
|
Preliminary results for the year ended 31 March
2025
|
21
May 2025
|
Contact
Details
Disclaimer
This
financial report contains forward-looking statements about
financial and operational matters. These statements are based on
the current views, expectations, assumptions, and information of
management, and are based on information available to the
management as at the date of this financial report. Because they
relate to future events and are subject to future circumstances,
these forward-looking statements are subject to unknown risks,
uncertainties and other factors which may not have been in
contemplation as at the date of the financial report. As a result,
actual financial results, operational performance, and other future
developments could differ materially from those envisaged by the
forward-looking statements. Neither SSE plc nor its
affiliates assumes any obligations to update any forward-looking
statements.
SSE
plc gives no express or implied warranty, representation, assurance
or undertaking as to the impartiality, accuracy, completeness,
reasonableness or correctness of the information, opinions or
statements expressed in the presentation or any other information
(whether written or oral) supplied as part of it. Neither SSE plc,
its affiliates nor its officers, employees or agents will accept
any responsibility or liability of any kind for any damage or loss
arising from any use of this presentation or its contents. All and
any such responsibility and liability is expressly disclaimed. In
particular, but without prejudice to the generality of the
foregoing, no representation, warranty, assurance or undertaking is
given as to the achievement or reasonableness of any future
projections, forward-looking statements about financial and
operational matters, or management estimates contained in the
financial report.
This
financial report does not constitute an offer or invitation to
underwrite, subscribe for, or otherwise acquire or dispose of any
SSE plc shares or other securities, or of any of the businesses or
assets described in the financial report, and the information
contained herein cannot be relied upon as a guide to future
performance.
Definitions
The
financial information set out in this Interim Results Statement has
been prepared in accordance with the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority and UK
adopted International Accounting Standard 34 Interim Financial
Reporting. The interim financial information is unaudited but has
been formally reviewed by the Group's statutory auditor and its
report to the Company is set out after the Interim Financial
Statements.
In
order to present the financial results and performance of the Group
in a consistent and meaningful way, SSE applies a number of
adjusted accounting measures throughout this financial report.
These adjusted measures are used for internal performance
management and are believed to present the underlying performance
of the Group in the most useful manner for ordinary shareholders
and other stakeholders.
The
definitions SSE uses for adjusted measures are explained in the
Alternative Performance Measures ("APMs") section before the
Interim Financial Statements. SSE continues to prioritise the
monitoring of developing practice in the use of APMs, ensuring the
financial information in its results statements is clear,
consistent, and relevant to the users of those
statements.
For
the purpose of calculating the 'Net Debt to EBITDA' metric, 'Net
Debt' represents the group's 'Adjusted Net Debt and Hybrid Capital"
APM and 'EBITDA' represents the full year group "Adjusted EBITDA"
APM and including a further adjustment to remove the proportion of
"Adjusted EBITDA" from equity-accounted Joint Ventures which
relates to project financed debt.
Online
Information
News
releases and announcements are made available on SSE's website
at www.sse.com/investors and you
can register for Regulatory News Service alerts using the following
link:
sse.com/investors/regulatory-news/regulatory-news-alerts/.
You can also follow the latest news from SSE at
www.twitter.com/sse.
Management presentation
webcast and teleconference
SSE
will present its interim results for the six months to 30 September
2024 on Wednesday 13 November at 08:30am GMT. The presentation will
be available to replay.
You
can join the webcast by visiting www.sse.com and following the
links on either the homepage or investor pages; or directly using:
edge.media-server.com/mmc/p/9bft4i7j
This
will also be available as a teleconference, for which participants
can register to receive a unique pin code and conference call
number using:
register.vevent.com/register/BI5f565c50b4df4864b930be33d0b01a36
Strategic Overview
sse at the heart of the
energy transition
SSE
has made a strong start to the 2024/25 financial year, with capital
delivery and quality earnings driving significant value for our
shareholders and wider society. This performance demonstrates the
resilience and value of our balanced business mix. The market
volatility that benefited SSE Thermal in the prior period was not
repeated, but it was more than offset by rising output in SSE
Renewables and high-quality electricity networks earnings. We also
saw margins recover in our customers businesses as they enjoyed
more normal market conditions.
The
underlying driver of this performance is our own clean energy plan,
the five-year Net Zero Acceleration Programme (NZAP) Plus. As it
reaches its halfway point, this fully-funded ~£20bn investment plan
continues to create value in the form of new renewables capacity
and increasing regulated asset value as it adds mission-critical
infrastructure to the energy system. The delivery focus of the NZAP
Plus, coupled with our enviable portfolio of renewables, flexible
back-up generation and electricity networks, puts us at the very
heart of the clean energy transition. SSE has the most attractive
renewables opportunities in one of the world's most attractive
markets. At the same time, we are building on the options we have
to back up the intermittency of renewables with an extensive
thermal generation fleet, flexible hydro and, increasingly, battery
assets. And we have ramped up investment and projects in
electricity networks, particularly in our transmission business as
it unlocks the north of Scotland's renewables potential.
The
new UK Government's urgency of intent on clean power by 2030 gives
us greater confidence in both the value of our climate-focused
strategy and the deliverability our ambitious development pipeline.
This has been underpinned by the recent report on Clean Power 2030
by the National Electricity System Operator (NESO) that set out the
critical roles of renewables, electricity networks and flexibility
in delivery of the UK Government's target. We have also seen an
acceleration of policy in specific areas like long-duration
storage, funding for Carbon Capture and Storage, planning reforms
and budgets for offshore wind auctions that all align with our
strategic priorities and reinforce our position as a major delivery
partner. Further afield, it is a similar story as the race to
decarbonise gathers pace in selected markets like the EU and Japan.
We are constructing renewables in three EU countries now and have
recently won the Ijmuden Ver Alpha offshore tender in the
Netherlands. The benefits of our significant investment in
renewables and electricity networks can be seen in the delivery in
the first half of both Viking onshore wind farm and the pioneering
HVDC transmission link that now connects Shetland to the mainland
for the first time.
But
there is much more to come. As we work through recent issues with
GE Vernova blades on Dogger Bank A, work is already well under way
on Dogger Bank B and C. In electricity networks, construction has
started on the Eastern Green Link 2, which is the biggest
transmission project undertaken in the UK, and we have received
final consent for an upgrade of the main electricity transmission
network across Argyll and Kintyre. Meanwhile, we are preparing to
submit our RIIO-T3 Business Plan in December for a price control
that will be a critical enabler of clean power by 2030 and beyond.
All this delivery is wholly dependent on employees and contract
partners who share a common purpose that seeks to build a better
world of energy. Keeping these people out of harm's way is our
number one objective, so it is pleasing to be able to report a
significant reduction in both the number of injuries and the Total
Recordable Injury Rate in the first half of the year.
Our
performance in the first half and the progress we are making on the
NZAP Plus gives us confidence in our 175-200p adjusted EPS target
by FY27, with clear visibility of growth within our renewables and
electricity networks plans. The transition to net zero offers an
enormous opportunity. At SSE we are seizing the moment thanks to
our delivery focus, the resilience and optionality of our business
mix and a combination of underlying balance sheet strength and
capital discipline that allows us to pursue growth when and where
the value is greatest.
Alistair Phillips-Davies
Chief Executive
SSE plc
Group
financial review
FINANCIAL PERFORMANCE FOR
SIX MONTHS TO 30 SEPTEMBER 2024
In
order to present the financial results and performance of the Group
in a consistent and meaningful way, SSE applies a number of
adjusted accounting measures throughout this financial report.
These adjusted measures are used for internal management reporting
purposes and are believed to present the underlying performance of
the Group in the most useful manner for shareholders and other
stakeholders.
The
definitions SSE uses for adjusted measures are consistently applied
and are explained - including a detailed reconciliation to reported
measures - in the Alternative Performance Measures section of this
document before the Interim Financial Statements.
Segmental EBITDA results are included in Note 5 to the
Interim Financial Statements.
|
Key Financial Metrics
(£m)
|
Adjusted
|
Reported
|
|
|
Sep 2024
|
Sep 2023
|
Sep 2024
|
Sep
20231
|
|
Segmental operating profit /
(loss)
|
|
|
|
|
|
SSEN
Transmission
|
157.5
|
215.6
|
210.0
|
287.3
|
|
SSEN
Distribution
|
346.3
|
120.1
|
346.3
|
120.1
|
|
Electricity networks
total
|
503.8
|
335.7
|
556.3
|
407.4
|
|
SSE
Renewables
|
335.6
|
86.8
|
270.5
|
18.3
|
|
SSE
Thermal
|
(9.0)
|
312.9
|
(6.3)
|
234.6
|
|
Gas
Storage
|
(34.8)
|
(86.7)
|
(34.8)
|
(91.3)
|
|
Thermal
Total
|
(43.8)
|
226.2
|
(41.1)
|
143.3
|
|
SSE Business
Energy
|
60.1
|
88.0
|
60.1
|
88.0
|
|
SSE Airtricity (NI and
Ire)
|
70.6
|
5.8
|
70.6
|
5.3
|
|
Energy Customer Solutions
Total
|
130.7
|
93.8
|
130.7
|
93.3
|
|
SSE Energy
Markets
|
14.1
|
9.0
|
79.3
|
88.9
|
|
SSE
Enterprise
|
(19.0)
|
(8.4)
|
(19.0)
|
(8.4)
|
|
Neos
Networks
|
(10.7)
|
(14.7)
|
(12.3)
|
(16.3)
|
|
Corporate
unallocated
|
(50.5)
|
(35.2)
|
(61.6)
|
(82.2)
|
|
Total operating
profit
|
860.2
|
693.2
|
902.8
|
644.3
|
|
|
|
|
|
|
|
Net
finance (costs) / income
|
(145.7)
|
(128.0)
|
(56.9)
|
(29.0)
|
|
Profit before
tax
|
714.5
|
565.2
|
845.9
|
615.3
|
|
|
|
|
|
|
|
Tax
charge
|
(96.0)
|
(88.4)
|
(213.3)
|
(155.9)
|
|
Effective tax rate
(%)
|
13.4
|
15.6
|
25.2
|
25.3
|
|
Profit after
tax
|
618.5
|
476.8
|
632.6
|
459.4
|
|
|
|
|
|
|
|
Less:
hybrid equity coupon payments
|
(73.7)
|
(73.1)
|
(73.7)
|
(73.1)
|
|
Less:
profits attributable to non-controlling interests
|
-
|
-
|
(36.8)
|
(51.2)
|
|
Profit after tax
attributable to ordinary shareholders
|
544.8
|
403.7
|
522.1
|
335.1
|
|
|
|
|
|
|
|
Earnings per share
(pence)
|
49.8
|
37.0
|
47.7
|
30.7
|
|
|
|
|
|
|
|
Number of shares for basic/reported and adjusted EPS
(million)
|
1,094.2
|
1,090.4
|
1,094.2
|
1,090.4
|
|
Shares in issue at 30 September
(million)2
|
1,105.4
|
1,092.1
|
1,105.4
|
1,092.1
|
1 Prior period reported
figures have been restated, for further details see note 2(v) to
the Interim Financial Statements
2 Excludes Treasury shares
of 3.0m in September 2024 and 3.6m in September
2023
Operating
profit
Adjusted and reported operating profits/losses in SSE's
business segments for the year to 30 September 2024 are set out
below; comparisons are with the same period to 30 September 2023
unless otherwise stated.
SSEN
Transmission
Adjusted operating profit, which is presented net of the
business' 25% non-controlling interest, decreased by 27% to £157.5m
from £215.6m in the prior period. Despite growing expenditure and
associated underlying allowances, a true-up for benefit received in
the 2023/24 financial year in relation to "full expensing"
accelerated capital allowances means that net allowed revenues were
lower than the prior period. In addition, operating costs continue
to grow as the business rapidly increases its workforce to deliver
on the growth programme agreed with the regulator and depreciation
increased in line with the asset base.
Reported operating profit decreased by 27% to £210.0m
compared to £287.3m, as a result of all of the movements above but
reflecting that non-controlling interests are fully consolidated
for all profit metrics under IFRS.
SSEN
Distribution
Adjusted and reported operating profit increased by 188% to
£346.3m compared to £120.1m in the prior period. The large increase
in price control allowed revenues in the period reflects that
2024/25 is the earliest financial year when unexpectedly-high cost
inflation in 2022/23 and 2023/24 can be recovered, as tariffs are
set 15 months before the start of financial year. The prior period
was also impacted by a volume-driven under recovery, with a small
over-recovery expected this financial year. This cost inflation
true-up and volume improvement is partially offset by increasing
operating costs associated with business transformation and
improving network resilience, as well as higher depreciation on a
growing asset base.
SSE
Renewables
Adjusted operating profit increased by 287% to £335.6m from
£86.8m in the prior period. The increase was largely driven
by a combination of increased operating capacity and favourable
weather conditions - with average wind speeds in Scotland around
14% higher than the comparative period - which drove a ~45%
increase in output. Operational capacity increased following Viking
Onshore Wind Farm achieving full commercial operations in August
2024, and Seagreen Offshore Wind Farm achieving commercial
operations in October 2023. In addition, SSE Renewables' first
battery energy storage system (BESS) was delivered at Salisbury in
April 2024. The increase in output was delivered in a higher hedged
price environment, with 2024/25 hedge prices around 30% higher than
the prior period, reflecting value from the long-established
Renewables hedging approach.
Reported operating profit increased to £270.5m from £18.3m in
the prior period. This reflects the above and other movements
including an increase in the Joint Venture / Associate share of
interest and tax, and a positive impact from exceptional items
comprising remeasurement on SSE's affiliate CfD arrangements which
are classified as derivative contracts.
SSE
Thermal
Adjusted operating profit decreased to a loss of £(9.0)m,
compared to £312.9m of profit in the prior period. The
majority of this decrease is due to the lower spark spread and
lower volatility market environment, following the normalisation of
energy prices from the start of 2024. Capacity market payments in
GB and Ireland were also reduced compared to the prior period,
reflecting lower auction prices achieved. However, strong
operational performance was seen in the period with lower levels of
unplanned outages in the period, with the business also benefiting
from the capacity addition of the 55MW Slough Multifuel plant in
August 2024.
Reported operating profit decreased to a loss of £(6.3)m,
compared to £234.6m of profit in the prior period. In addition to
the movements above, the prior period reported result was impacted
by a £(76.7)m loss from a non-recurring impairment charge on Triton
Power and losses on remeasurements of operating derivatives in that
business.
Gas
Storage
Adjusted operating loss decreased to a £(34.8)m loss,
compared to a loss of £(86.7)m in the prior period. As a seasonal
business, a typical year sees gas injected in the summer months
when prices are low and then withdrawn and sold in winter months
when prices are higher. Trading churn of the injected gas held in
storage - driven by decreasing gas prices - has the effect of
lowering the average cost of gas and therefore creating an adjusted
operating loss. This loss is typically reversed in the winter
months, as gas is withdrawn into a higher price environment. The
lower level of half year loss reflects the lower levels of gas
price volatility in the market this period.
Reported operating loss decreased to a £(34.8m) loss,
compared to a loss of £(91.3)m in the prior period. In addition to
the movements above, the prior period reflected a £(4.6)m
mark-to-market loss on the fair value of physical gas inventory
held which was not repeated this period.
SSE Business
Energy
Adjusted and reported profitability decreased to £60.1m in
the year compared to £88.0m in the prior year. The seasonal
phasing of earnings continues to drive greater realised margins in
the first half of the financial year, with profitability then
expected to partially reverse for the full year. Following the
implementation of a new customer management system - Evolve - the
focus has been on servicing our existing customers, resulting in a
tapering down of acquisition activity, which has contributed to an
overall reduction in customer numbers and consumption volumes.
Reduction in bad debt expense of £39.5m partially offset this fall,
as improved customer data from the Evolve system, lower customer
tariffs and a more stable market price environment reduced the
overall level of provisioning required. During the period customer
tariffs were reduced as markets stabilised.
SSE
Airtricity
Adjusted profitability increased to £70.6m, from £5.8m in the
prior period. The prior period saw lower margins realised as the
business honoured its commitment to support customers throughout
the cost-of-living crisis by largely absorbing the impact of higher
commodity costs and indirect costs including bad debt expenses. The
normalisation of energy prices in the first six months has meant
the business has been able to deliver tariff reductions to
customers whilst also returning supply margins to more sustainable
levels. This improvement was further aided by an increase in income
from legacy wind farms contracted to SSE Airtricity which rose to
£15.9m in the current period.
Reported operating profit also increased to £70.6m compared
to £5.3m in the prior period, with the prior period reflecting a
£(0.5)m share of interest and tax from Joint Ventures, in addition
to the movements above.
SSE Energy
Markets
Adjusted operating profit has increased to £14.1m from a
£9.0m profit in the prior period. With Energy Markets continuing to
drive significant value for the energy exposed businesses through
its trading services, the business itself continues to generate a
relatively low level of baseline operating earnings from these
services which is supplemented by optimisation activities and
contracting for third party Power Purchase Agreement and route to
market contracts. The increase in period-on-period profitability is
mainly due to gains from optimisation trades which benefited from
increased margins achieved on gas and power trades across both UK
and EU markets.
Reported operating profit decreased by 11% to £79.3m from
£88.9m in the prior period. In addition to the movements above, the
reported operating result includes a lower level of net
remeasurement gains on forward commodity derivatives in the year
relative to a higher gain in the prior period. In line with
previous periods, these IFRS 9 remeasurements exclude any
remeasurement of 'own use' contracts and are unrelated to
underlying operating performance.
SSE
Enterprise
An
adjusted and reported operating loss of £(19.0)m was recognised,
compared to a loss of £(8.4)m in the prior period. The business
continues to incur planned losses as it invests in a range of new
pipeline opportunities across a range of localised and flexible
smart energy infrastructure technologies, in addition to underlying
inflationary increases in the operating cost base.
In
September 2024, a restructuring of SSE Enterprise commenced which
will see the existing activities of the business integrated into
other Business Units for a simpler Group organisational structure
and enhanced platforms for growth.
Neos
Networks
SSE's
remaining 50% share in the Telecoms business Neos Networks Limited
recorded an adjusted operating loss of £(10.7)m compared to
£(14.7)m in the prior period, continuing to reflect the planned
losses incurred to support future business growth.
The
reported result in both the current and previous year also includes
a £(1.6)m charge being SSE's share of Joint Venture Interest and
Tax expenditure.
Corporate
Unallocated
Adjusted operating loss of £(50.5)m compares against a loss
of £(35.2)m in the prior period. The current period result includes
a one-off impairment charge of £11.3m relating to legacy IT systems
which were replaced in the period as part of IT Infrastructure
upgrades.
Reported operating losses decreased from £(82.2)m in the
prior period to £(61.6)m, with the prior period including a
£(50.5)m exceptional charge relating to the Group's exposure on
certain financial guarantee liabilities following adoption of IFRS
17. In contrast, the current period reflected an exceptional
charge of £(21.9)m relating to the disposal of the Infrastructure
Solutions component of Enerveo Limited which is expected to
complete in the second half of the year. The reported result also
includes a £10.8m positive revaluation adjustment relating to the
legacy Gas Production decommissioning provision compared to a £3.5m
positive adjustment on the same provision in the prior
period.
Earnings per
share
In
the six months ended 30 September 2024, SSE's adjusted earnings per
share was 49.8p. This compares to 37.0p for the previous period and
reflects the movements in adjusted operating profit outlined in the
section above in addition to higher year-on-year interest charges
from Seagreen offshore windfarm following that Joint Venture
reaching full operations in October 2023, partially offset by a
lower tax rate as a result of increased first-year capital
allowances available on an accelerated capital investment
programme.
Reported earnings per share has increased to 47.7p from 30.7p
in the previous period and, in addition to the movements in
adjusted earnings per share noted above, reflects the £81.9m
favourable net remeasurement on derivatives and commodities held at
fair value during the year, offset by £21.6m of exceptional items
and an increase in Deferred Tax driven by capital allowances on an
accelerating capital investment programme. Please see the
Supplemental Financial Information section of this Statement for
more details.
Interim
Dividend
|
Dividend per Share
(pence)
|
Mar 2025
|
Mar 2024
|
|
Interim Dividend
|
21.2
|
20.0
|
|
Final
Dividend
|
To be
confirmed at preliminary results in May 2025
|
40.0
|
|
Full Year
Dividend
|
To be confirmed at
preliminary results in May 2025
|
60.0
|
SSE
believes that dividends should be sustainable and based on earnings
performance, whilst also enabling the longer-term growth prospects
of its assets and operations. To that end, the existing dividend
plan to 2026/27 is designed to balance income to shareholders with
the appropriate funding for an accelerated growth plan that will
ultimately create greater value and total return for shareholders
over the long term.
In
line with that dividend plan and reflecting the financial
performance over the first six months of the year, SSE today
announces an interim dividend of 21.2 pence for payment on 27
February 2025. This represents an increase of 6% on the 2023/24
Interim Dividend.
financial outlook
FINANCIAL OUTLOOK for
2024/25
SSE's
balanced portfolio of assets across electricity networks,
renewables and flexible thermal generation mean that the Group is
confident of delivering strong and sustainable operating profit
over the coming years.
The
first half of SSE's financial year has seen the Group deliver
strong performance, in line with expectations, in an evolving
market environment. The greater operating profit contribution from
electricity networks' businesses has reduced the level of
seasonality in the half year results, with the higher output
delivered by renewables meaning that flexible thermal generation
capacity was not required as often in a stable market
environment.
The
expectations set out in May 2024 by the Group for operating profits
by business therefore remain broadly unchanged, with the key winter
months still to come for renewables and flexible thermal
generation:
· SSEN
Transmission - continues to expect
that operating profit will be lower than the prior year, with
reduced tariffs reflecting the economically neutral "full
expensing" taxation relief for qualifying capital expenditure,
which is netted off revenue.
· SSEN
Distribution - continues to expect
that operating profit will be significantly higher than the prior
year outturn, with the expected inflationary catch-up in tariffs
expected to more than double operating profit.
· SSE Renewables
- the increase in hedged prices combined with the
additional capacity from Seagreen offshore windfarm and Viking
onshore windfarm means that operating profits are expected to
increase significantly year-on-year.
· SSE Thermal and Gas
Storage - expects that the current
loss-making position will reverse in the second half of the
financial year, with full year adjusted operating profits from
these assets of around £200m in current market
conditions.
· Energy Customer
Solutions - whilst the seasonal
phasing of earnings in Business Energy is expected to partially
reverse the first half result, Energy Customer Solutions continues
to expect full year adjusted operating profit for this segment to
be at a similar level as the prior year.
These
expectations are subject to normal weather conditions, current
market conditions and plant availability.
Consistent with the approach taken in prior years, we will
look to give specific adjusted earnings per share guidance later in
the financial year.
Under
the existing dividend commitment to increase dividends by between 5
- 10% per annum, the recommendation for the final dividend will be
made in May 2025, as part of the Full Year Results
Statement.
With
capital expenditure and investment continuing to ramp up during the
first six months of the year, the full year capex is expected to
significantly increase to around £3bn, with the net debt to EBITDA
ratio expected to be towards the lower end of the 3.5 - 4.0x
targeted range.
Net Zero Acceleration
Programme PLUS
Reaching the mid-point of
the NZAP Plus - a ~£20bn Five Year Investment
Programme
SSE
set out its "Net Zero Acceleration Programme Plus" or "NZAP Plus"
in November 2023, providing the market with a fully funded
five-year investment plan to the end of the 2026/27 financial year,
which reflected the strong progress made in delivering the original
investment plan, whilst recognising the impact from a changing
macroeconomic environment.
This
investment programme targets capital expenditure of around £20bn
over the five-year period, with a weighting towards regulated
electricity networks as follows:
· SSEN
Transmission (~37% or ~£7.5bn) in
delivery of the RIIO-T2 baseline investment programme as well as
part of the ~£20bn of additional gross nominal investment to
deliver eleven LOTI and ASTI projects critical to removing
constraints within the current electricity transmission network.
This investment is expected to increase gross RAV to more than
£10bn by the end of 2026/27, whilst delivering expected adjusted
operating profits (net of 25% Non-Controlling Interest) of more
than £400m on average across the five year plan.
· SSEN
Distribution (~17% or ~£3.5bn) in
delivery of its RIIO-ED2 investment programme which continues to
progress at pace. This business continues to expect RAV to increase
to between £6 - 7bn by the end of 2026/27 and deliver expected
adjusted operating profits of at least £450m on average across the
five year plan.
· SSE Renewables
(~34% or ~£7bn) to deliver on its existing
construction programme. Whilst the target to reach around 9GW of
installed capacity by 2026/27 remains, the business continues to
focus on financial discipline and selective renewables growth only
where it is value accretive. With that focus, the business does not
need to reach the 9GW target in order to achieve an expected ~19%
adjusted operating profit CAGR over the five-year plan.
· SSE Thermal and other
businesses (~12% or ~£2.5bn)
comprise the majority of the remaining expected investment, with
delivery of Keadby 2, Slough Multifuel and other projects helping
Thermal to achieve ~£400m adjusted operating profits on average
over the four years to FY27.
With
around 90% of the investment plan still expected to be invested in
electricity networks and renewables, the substantial majority is
focused on climate solutions to achieve SSE's 2030 Goals which are
linked to its most highly-material UN Sustainable Development Goals
(SDGs) and aligned to the Technical Screening Criteria of the EU
Taxonomy.
Continued strong balance
sheet as the foundation of a fully-funded investment
plan
SSE
has continually demonstrated its ability to realise value from
disposals, create sustainable earnings growth and raise capital at
highly attractive terms. Over the plan to date, £3.7bn of long-term
debt has been issued at attractive, fixed coupons.
The
financial strength of the Group and continued earnings growth means
that it expects to still be within or below the target range of 3.5
- 4.0x net debt / EBITDA over the course of the plan to
2026/27.
Reaffirming expected
earnings growth and dividend plan
After
considering the Group's latest view of project delivery out to
2026/27, in addition to the current and forecasted market
conditions, SSE continues to have confidence in reaching its 175 -
200p adjusted earnings per share guidance range for 2026/27. This
takes into account increased visibility over investment through
regulatory approvals for network upgrades, the delivery of projects
such as Seagreen and Viking and the extension of "full expensing"
capital allowances.
Reflecting the SSE plc Boards' confidence in delivering this
future earnings growth, the commitment to target dividend increases
of between 5 to 10% per year across 2024/25, 2025/26 and 2026/27
remains unaffected. This plan retains the scrip dividend option for
shareholders, with the cap on take-up still set at 25% and
implemented (if necessary) by means of a share buy-back.
Supplemental financial information
|
Adjusted Investment and
Capex Summary
|
Sep 2024
Share %
|
Sep 2024
£m
|
Sep 2023
£m
|
|
SSEN
Transmission (net of 25% non-controlling interest)
|
29%
|
376.6
|
242.6
|
|
SSEN
Distribution
|
23%
|
296.2
|
245.5
|
|
Regulated networks
total
|
52%
|
672.8
|
488.1
|
|
|
|
|
|
|
SSE
Renewables
|
38%
|
491.9
|
447.1
|
|
|
|
|
|
|
SSE
Thermal
|
4%
|
46.4
|
38.2
|
|
Gas
Storage
|
-%
|
0.9
|
0.2
|
|
Thermal Energy
Total
|
4%
|
47.3
|
38.4
|
|
|
|
|
|
|
Energy Customer Solutions
|
3%
|
36.2
|
36.8
|
|
|
|
|
|
|
SSE
Energy Markets
|
-%
|
4.5
|
3.4
|
|
|
|
|
|
|
SSE
Enterprise
|
2%
|
27.0
|
15.2
|
|
|
|
|
|
|
Corporate unallocated
|
1%
|
12.4
|
25.3
|
|
|
|
|
|
|
Adjusted investment and
capital expenditure
|
100%
|
1,292.1
|
1,054.3
|
|
|
|
|
|
|
Adjusted investment, capital
and acquisitions expenditure
|
100%
|
1,292.1
|
1,054.3
|
Capital Expenditure
Programme
During the 6 months to 30 September 2024, SSE's adjusted
investment, capital and acquisitions expenditure totalled
£1,292.1m, compared to £1,054.3m in the same period last
year.
Investment in the reporting period was driven mainly by SSE's
renewables and electricity networks divisions, with limited
deployment of capital in thermal and other businesses, and no
acquisitions expenditure.
In
SSEN Transmission, £376.6m
net capex was delivered, including £49m on the EGL2 subsea HVDC
being jointly delivered with National Grid, as onshore works get
underway. Construction has also commenced on Orkney HCAV system
where £24m net capex was delivered and £23m was invested in Argyll
and Kintyre after final planning approvals for the 275kV upgrade
were granted in the period.
In
SSEN Distribution the
£296.2m capex invested represents a more than 20% increase on the
same period in 2023/24, as the business ramps up delivery of an
ambitious RIIO-ED2 investment programme. £115m was delivered in the
north, covering both ongoing subsea cable investment and regional
whole-circuit work. Whilst in the south, expenditure of £181m
included reinforcement work at Iver in West London and
Bramley-Thatcham near Reading.
SSE Renewables
invested a total of £491.9m during the period,
including £30m on Viking Onshore Wind Farm on Shetland, which
entered full commercial operations during August 2024. £33m
of capex was delivered in Southern Europe, with progress being made
across projects in Jubera (Spain), Chaintrix (France) which
achieved first power in October 2024, and Puglia (Italy). In
Ireland, £27m was invested at Yellow River, where full commercial
operations are expected during Spring 2025. In offshore,
£116m of equity was drawn as installation and commissioning of
turbines at Dogger Bank Offshore Wind Farm continues, with
completion now expected in the second half of calendar year 2025.
On battery and energy storage system (BESS) projects £71m was
delivered on Ferrybridge (West Yorkshire) with completion expected
during 2025.
Hedging
Position
The
long-established approach to hedging followed by SSE looks to
generally reduce its broad exposure to commodity price variation in
advance of delivery. SSE continues to monitor market developments
and conditions and periodically alters its hedging approach in
response to changes in its exposure profile.
A
summary of the hedging position for each of SSE's market-based
businesses is set out below.
SSE Renewables - GB wind and
hydro:
Energy output hedges are progressively established through
the forward sale of either:
§ Electricity - where market depth
and liquidity allow;
§ Gas and carbon equivalents -
recognising that spark spread exposures remain; or
§ Gas equivalents only - recognising
that carbon and spark spread exposures remain.
This
approach reflects that certain energy products have lower available
forward market depth and liquidity. Whilst some basis risk or
commodity exposure will remain, it facilitates the reduction of SSE
Renewables' overall exposure to potentially volatile spot market
outcomes.
The
table below notes both the proportion of hedges and prices of those
hedges for electricity and for gas alone (i.e. where the carbon leg
has been unable to be hedged). Due to market liquidity, there are
no gas and carbon equivalent hedges in place.
|
|
As at 31 March
2024
|
As at 30 September
2024
|
|
|
2024/25
|
2025/26
|
2026/27
|
2027/28
|
|
Wind
|
|
|
|
|
|
Total energy output volumes
hedged - TWh
|
6.4
|
8.2
|
4.4
|
0.7
|
|
- Hedge in electricity & equivalents -
TWh
|
4.1
|
4.3
|
2.6
|
0.5
|
|
- Electricity hedge price - £MWh
|
£91
|
£87
|
£75
|
£69
|
|
- Hedge in Gas - TWh
|
2.3
|
3.9
|
1.8
|
0.2
|
|
- Gas hedge price - £MWh
|
£122
|
£76
|
£57
|
£47
|
|
|
|
|
|
|
|
Hydro
|
|
|
|
|
|
Total energy output volumes
hedged - TWh
|
2.9
|
2.7
|
1.4
|
0.1
|
|
- Hedge in electricity & equivalents -
TWh
|
1.8
|
1.2
|
0.8
|
0.1
|
|
- Electricity hedge price - £MWh
|
£96
|
£86
|
£74
|
£67
|
|
- Hedge in Gas - TWh
|
1.1
|
1.5
|
0.6
|
-
|
|
- Gas hedge price - £MWh
|
£120
|
£82
|
£57
|
-
|
Note: where gas and carbon
trades have been used as a proxy for electricity, a constant 1
MWh:69.444 th and 1MWh:0.3815 te/MWh conversion ratio between
commodities has been applied. These same ratios have been used to
convert underlying commodity prices into electricity £MWh and
therefore no assumptions have been made on either spark or
carbon.
The
table above reflects the hedge position against outright merchant
power production. It therefore excludes any volumes and income
under separate contracts such as CfDs, ROCs and Balancing Mechanism
activity.
Limited hedging activity has now commenced for SSE's equity
share of Dogger Bank A wind farm, with volumes hedged therefore
included within the table above. Given the project is still under
construction, hedging activity has been limited to a risk-adjusted
forecast of expected pre-CfD volumes with hedges only commencing
during the second half of calendar year 2025.
SSE's
established approach seeks to minimise the volumetric downside risk
for renewable energy output by targeting a hedge of less than 100%
of its anticipated wind energy output for the coming 12
months.
The
targeted hedge percentage is reviewed and adjusted as necessary to
reflect any changes in market and wind capture insights. The last
such revision occurred in September 2023, setting a baseline target
hedge of around 80% of the anticipated energy output from wind and
hydro for twelve months.
Energy output hedges for both wind and hydro are
progressively established over the 36 months delivery (although the
extent of hedging activity for future periods also depends on the
available market depth and liquidity).
Target hedge levels are achieved through the forward sale of
either electricity or a combination of gas or carbon equivalents as
outlined above. When gas-and-carbon hedges are converted into
electricity hedges a "spark spread" is realised which can lead to
changes in the average hedge price expected. This can increase the
previously published average hedge price or decrease it. Likewise,
when gas hedges are subsequently converted into electricity hedges
ahead of delivery, a carbon-and-spark spread value is realised
which will also lead to changes in the average hedge price
expected.
GB
Thermal:
Hedging for the flexible thermal fleet is based upon a
mathematical assessment of the optimal option delta based upon
volatility, shape and time assumptions. At negative spark spreads
this hedge volume is therefore likely to be very low; and at higher
prices the hedge will be much fuller. The targeted hedge position
for the flexible thermal fleet is therefore dynamic, changing as
market values vary, with the constant process of reoptimisation
(where liquidity permits) accruing value to the Thermal fleet in
future periods.
At
all times the Thermal portfolio offers the wider group protection
from price spikes, renewables shortfall or asset availability
issues and therefore has material risk management value to the
Group. This is in addition to the value it provides to the wider
market as a back-up reserve to an increasingly renewables led
energy-system, principally remunerated through the Capacity
Mechanism.
Gas
Storage:
The
assets are being commercially operated to optimise value arising
from changes in the spread between summer and winter prices, market
volatility and plant availability.
At 30
September 2024, 117mTh of gas inventory was physically held which
represents 62% of SSE's share of gross capacity (at 30 September
2023, 109mTh of gas inventory representing 58% of SSE's share of
gross capacity).
SSE Business
Energy:
The
business supplies electricity and gas to business and public sector
customers. Sales to contract customers are hedged: at point of sale
for fixed contract customers; upon instruction for flexi contract
customers; and on a rolling hedge basis for tariff
customers.
Given
the pricing and macro-economic context, SSE Business Energy is
dynamically monitoring nearer term consumption actuals for early
signs of demand variability and adjusting future volumes hedged
accordingly.
SSE Energy
Markets:
This
business provides the route to market and manages the execution for
all of SSE's commodity trading outlined above (spark spread, power,
gas, oil and carbon). This includes monitoring market conditions
and liquidity and reporting net Group exposures. The business
operates under strict position limits and VAR controls.
There
is some scope for position-taking to permit this business to manage
around shape and liquidity and providing market insight whilst
taking optimisation opportunities. This is contained within a total
daily VAR limit of £9m.
Ireland:
Vertical integration of the generation and customer
businesses in Ireland limits the Group's commodity exposure in that
market.
exceptional items and
certain remeasurements
Exceptional
items
In
the period ended 30 September 2024, SSE recognised a net
exceptional charge within continuing operations of £(21.6)m before
tax. The following table provides a summary of the key components
included in the net charge:
|
Exceptional (charges) /
credits
within continuing
operations
|
Total
£m
|
|
Enerveo part-disposal (previously SSE Contracting)
|
(21.9)
|
|
Other
|
0.3
|
|
Total exceptional
charge
|
(21.6)
|
Note: The definition of
exceptional items can be found in Note 2(iii) of the Interim
Financial Statements.
For a
full description of exceptional items, see Note 6 of the Interim
Financial Statements.
Certain
remeasurements
In
the period ended 30 September 2024, SSE recognised a favourable net
remeasurement within continuing operations of £81.9m before tax.
The following table provides a summary of the key components making
up the favourable movement:
|
Certain
remeasurements
within continuing
operations
|
Total
£m
|
|
Operating derivatives (including share from jointly
controlled entities)
|
86.5
|
|
Financing derivatives
|
(4.6)
|
|
Total net favourable
remeasurement
|
81.9
|
Operating
derivatives
SSE
enters into forward purchase contracts (for power, gas and other
commodities) to meet the future demands of its energy supply
businesses and to optimise the value of its generation assets. Some
of these contracts are determined to be derivative financial
instruments under IFRS 9 and as such are required to be recorded at
their fair value as at the date of the financial
statements.
SSE
shows the change in the fair value of these forward contracts
separately as this mark-to-market movement does not reflect the
realised operating performance of the businesses. The underlying
value of these contracts is recognised as the relevant commodity is
delivered, which for the large majority of the position at 30
September 2024 is expected to be within the next 6 - 18
months.
The
change in the operating derivative mark-to-market valuation was a
£86.5m positive movement from the start of the period, reflecting a
£118.7m positive movement on fully consolidated operating
derivatives combined with a £(32.2)m share of movement on
derivatives in jointly controlled entities (or a £(24.2)m share net
of tax) driven by commodity contract revaluations.
The
positive movement of £118.7m on fully consolidated operating
derivatives includes:
· Settlement during the year of £67.1m of previously net
"out-of-the-money" contracts in line with the contracted delivery
periods and
· A
favourable net mark-to-market remeasurement of £51.6m on unsettled
contracts including affiliate CfDs, entered into in line with the
Group's stated approach to hedging. This mark-to-market
remeasurement reflects the reduced volatility seen in
commodity markets during the period.
As in
prior periods, the reported result does not include remeasurement
of 'own use' hedging agreements which do not meet the definition of
a derivative financial instrument under IFRS 9 "Financial
Instruments".
Commodity stocks held at
fair value
Gas
inventory purchased by the Gas Storage business for secondary
trading opportunities is held at fair value with reference to the
forward month market price. With the trading churn in the period
having adjusted the average cost of gas in the period though
creating an adjusted operating loss for the business, the relative
stability in gas prices mean that the book value is aligned with
the fair value at the period end.
However, whilst this assessment considers the net change in
fair value of physical gas inventory held at the period end, it
does not take into account any positive or negative mark-to-market
movement on forward contracted sales. Therefore, similar to
derivative contracts held at fair value, SSE does not expect that
any valuation movement will reflect the final result realised by
the business.
Financing
derivatives
In
addition to the movements above, an adverse movement of £(4.6)m was
recognised on financing derivatives in the period, including
mark-to-market movements on cross-currency swaps and floating rate
swaps that are classed as hedges under IAS 39. These hedges ensure
that any fair value movement in net debt is predominately offset by
a movement in the derivative position. The adverse movement was
primarily driven by a declining interest rate environment, driving
an increase in the "out of the money" position on SSE's fixed rate
swaps.
These
remeasurements are presented separately as they do not represent
underlying business performance in the year. The result on
financing derivatives will be recognised in adjusted profit before
tax when the derivatives are settled.
Financial management and
balance sheet
|
Debt
metrics
|
Sep 2024
£m
|
Mar 2024
£m
|
Sep 2023
£m
|
|
Net Debt /
EBITDA1
|
N/A
|
3.0x
|
N/A
|
|
Adjusted net debt and hybrid
capital (£m)
|
(9,843.8)
|
(9,435.7)
|
(8,943.8)
|
|
Average debt maturity (years)
|
6.3
|
6.4
|
5.9
|
|
Adjusted interest cover
|
N/A
|
8.9x
|
N/A
|
|
Average cost of debt at period end (including all hybrid
coupon payments)
|
4.04%
|
3.90%
|
4.02%
|
1 Net debt represents the
group adjusted net debt and hybrid capital. EBITDA represents
the full year group adjusted EBITDA, less £179.6m at March 2024 for
the proportion of adjusted EBITDA from equity-accounted Joint
Ventures relating to project financed debt.
|
Net finance costs
reconciliation
|
Sep 2024
£m
|
Sep 2023
£m
|
|
Adjusted net finance
costs
|
145.7
|
128.0
|
|
Add/(less):
|
|
|
|
Lease
interest charges
|
(11.0)
|
(11.7)
|
|
Notional interest arising on discounted provisions
|
(13.2)
|
(11.0)
|
|
Hybrid equity coupon payment
|
73.7
|
73.1
|
|
Adjusted finance costs for interest cover
calculation
|
195.2
|
178.4
|
|
Principal Sources of debt
funding
|
Sep 2024
|
Mar 2024
|
Sep 2023
|
|
Bonds
|
62%
|
58%
|
54%
|
|
Hybrid debt and equity securities
|
17%
|
18%
|
18%
|
|
European investment bank loans
|
4%
|
5%
|
5%
|
|
US
private placement
|
7%
|
8%
|
8%
|
|
Short-term funding
|
7%
|
8%
|
11%
|
|
Index
-linked debt
|
3%
|
3%
|
4%
|
|
% of which has been secured
at a fixed rate
|
94%
|
93%
|
91%
|
|
Rating
Agency
|
Rating
|
Criteria
|
Date of
Issue
|
|
Moody's
|
Baa1
'stable outlook'
|
'Low
teens' Retained Cash Flow/Net Debt
|
19
December 2023
|
|
Standard and Poor's
|
BBB+
'outlook positive'
|
About
18% Funds From Operations/Net Debt
|
5
September 2023
|
Maintaining a strong balance
sheet
A key
objective of SSE's long-term approach to balancing capital
investment, debt issuance and securing value and proceeds from
disposals is by maintaining a strong net debt/EBITDA ratio. SSE
calculates this ratio based on a methodology that it believes best
reflects its activities and commercial structure, in particular its
strategy to secure value from partnering by using Joint Ventures
and non-recourse project financing.
SSE
considers it has the capacity to reach a ratio of up to around
4.5x, comparable with private sector utilities across Europe,
whilst remaining above the equivalent ratios required for an
investment grade credit rating.
Given
the strength of the Group's Balance Sheet, the net debt/EBITDA
ratio at 31 March 2024 was well below this threshold at 3.0x. It is
expected that this ratio will trend upwards to around 4.0x, as the
Group delivers on its ~£20bn investment plan to 31 March
2027.
SSE's
Standard and Poor's credit rating was re-affirmed in September 2023
at BBB+ with 'outlook positive' and its Moody's rating was
reaffirmed in December 2023 at Baa1 with 'stable
outlook'.
Adjusted net debt and hybrid
capital
SSE's
adjusted net debt and hybrid capital was £9.8bn at 30 September
2024, an increase of £0.4bn from 31 March 2024. With no significant
acquisitions or divestments in the period, the debt movement
predominantly relates to capital investment expenditure, with
revaluation of currency debt as well as various working capital
movements being offset by operating cash flows less dividend
payments.
Debt summary as at 30
september 2024
The
Group, through the Scottish Hydro Electric Transmission plc entity,
issued £0.9bn of new long-term debt in the financial period whilst
also continuing to roll Commercial Paper at similar levels to March
2024:
· In
June 2024 Scottish Hydro Electric Transmission plc issued an 1.5bn
NOK (£111m) 10-year private placement maturing June 2034 with a
coupon of 4.731% and an all-in GBP cost of 5.3315% once swapped
back to Sterling.
· In
July 2024 Scottish Hydro Electric Transmission plc issued a £30m
15-year private placement maturing July 2039 with a coupon of
5.591%.
· In
August 2024 Scottish Hydro Electric Transmission plc issued a €850m
(£715m) 8-year green bond maturing September 2032 with a coupon of
3.375% and an all-in GBP cost of 4.9127% once swapped back to
Sterling.
· Over
the course of the year, SSE plc rolled maturing short-term
Commercial Paper at similar levels to March 2024. On 30 September
2024 €955m (£810m. Commercial Paper has been issued in Euros and
swapped back to Sterling at an average cost of debt of 5.50% and
matures between October 2024 and January 2025.
In
the six months to 30 September 2024 £0.2bn of medium-to-long-term
debt has matured comprising $320m (£204m) of US Private Placements
which matured in April 2024.
Over
the next twelve months there is a further £1.0bn of
medium-to-long-term debt maturing being the €600m (£531m) Eurobond
maturing 16 April 2025 and €600m (£499m) Eurobond maturing 8
September 2025. As noted above, €955m (£810m) of short-term debt in
the form of Commercial Paper is also due to mature in the second
half of 2024/25, however the current intention is to roll this
maturing short-term debt forward throughout the 2024/25 and 2025/26
financial years.
Hybrid bonds summary as at
30 september 2024
Hybrid bonds are a valuable part of SSE's capital structure,
helping to diversify SSE's investor base and supporting credit
ratings, as their 50% equity treatment by the rating agencies is
positive for credit metrics.
A
summary of SSE's hybrid bonds as at 30 September 2024 can be found
below:
|
Issued
|
Hybrid Bond
Value1
|
All in
rate2
|
First Call
Date
|
Accounting
Treatment
|
|
July
2020
|
£600m
|
3.74%
|
Apr
2026
|
Equity accounted
|
|
July
2020
|
€500m
(£453m)
|
3.68%
|
July
2027
|
Equity accounted
|
|
April
2022
|
€1bn
(£831m)
|
4.00%
|
Apr
2028
|
Equity accounted
|
1 Sterling equivalents
shown reflect the fixed exchange rate on date of receipt of
proceeds and is not subsequently revalued.
2 All in rate reflects
coupon on bonds plus any cost of swap into sterling which currently
only applies to July 2020 Hybrid.
Further details on each hybrid bond can be found in Note 14
to the Interim Financial Statements and a table noting the amounts,
timing and accounting treatment of coupon payments is shown
below:
|
Hybrid coupon
payments
|
2025/26
|
2024/25
|
|
|
HYe
|
FYe
|
HYa
|
FYa
|
|
Total equity (cash)
accounted hybrid coupon1
|
£74m
|
£74m
|
£74m
|
£74m
|
1 Coupon payments on €1.5bn
of hybrid bonds remain denominated in Euros, and are therefore
subject to foreign exchange adjustments.
SSE's
hybrid bonds are perpetual instruments and are therefore accounted
for as part of equity within the Interim Financial Statements but,
consistent with previous periods, have been included within SSE's
'Adjusted net debt and hybrid capital' to aid
comparability.
The
coupon payments relating to the equity accounted hybrid bonds are
presented as distributions to other equity holders and are
reflected within adjusted earnings per share when paid.
Managing net finance
costs
SSE's
adjusted net finance costs - which exclude equity accounted hybrid
coupons - were £(145.7)m in the six months to 30 September 2024,
compared to £(128.0)m in the previous period. The higher level of
finance costs in the period is driven by a higher share of Joint
Venture interest costs, predominantly due to interest charges from
Seagreen offshore wind farm project finance. This is partially
offset by higher capitalised interest costs reflecting continued
increasing construction activity.
Reported net finance costs were £(56.9)m compared to £(29.0)m
in the previous period. Higher interest charges incurred in Joint
Ventures combined with a £(45.6)m decrease in beneficial movement
on financing derivatives as previously referenced more than offset
the reduction seen in adjusted net finance costs
Summarising cash and cash
equivalents
At 30
September 2024, SSE's adjusted net debt included cash and cash
equivalents of £0.9bn, which is broadly unchanged from September
2023.
Cash
collateral is only required for forward commodity contracts traded
through commodity exchanges, with the level of cash collateral
either provided or received depending on the volume of trading
through the exchanges, the periods being traded and the associated
price volatility.
At 30
September 2024, £(260.2)m of net cash collateral was held (2023:
£140.6m net posted) consisting of £(264.6)m received offset by
£4.4m deposited on the commodity trading exchanges. The decrease in
cash collateral posted reflects an increase in the "in the money"
trading positions held by the Group.
Revolving Credit Facility /
SHORT-TERM FUNDING
SSE
had £3.5bn gross of committed bank facilities in place at 30
September 2024 to ensure the Group has sufficient liquidity to
allow day-to -day operations and investment programmes to continue
in the event of disruption to Capital Markets preventing SSE from
issuing new debt for a period of time. These facilities are set out
in the table below.
|
Date
|
Issuer
|
Debt type
|
Term
|
Value
|
|
Mar
19
|
SSE
plc
|
Syndicated Revolving Credit Facility with 10 Relationship
Banks
|
2026
|
£1.3bn
|
|
Oct
19
|
SSE
plc
|
Revolving Credit Facility with Bank of China
|
2026
|
£200m
|
|
Nov
22
|
SHET
plc
|
Syndicated Revolving Credit Facility with 11 Relationship
Banks
|
2026
|
£750m
|
|
Nov
22
|
SHEPD
plc and SEPD plc
|
Syndicated Revolving Credit Facility with 11 Relationship
Banks
|
2026
|
£250m
|
|
Feb
23
|
SSE
plc
|
Syndicated Revolving Credit Facility with 10 Relationship
Banks
|
2025
|
£1.0bn
|
The
facilities can also be utilised to cover short-term funding
requirements - however they were undrawn for most of the period and
remained undrawn as at 30 September 2024.
Since
30 September 2024, the above facilities have been cancelled and
replaced, leaving the SSE Group with the following committed
facilities with a syndication of 15 Relationship Banks
· £1.5bn revolving credit facility at SSE plc maturing October
2029 with two one-year extension options.
· £1.5bn revolving credit facility at Scottish Hydro Electric
Transmission plc maturing October 2029 with two one-year extension
options.
Both
these new facilities are classified as sustainability linked with
interest rate and fees paid dependant on various ESG-related
metrics being achieved.
In
addition to the above, a $300m private placement shelf facility
exists with NY Life which can be drawn in approximately two equal
tranches 12 months apart over before February 2026. At 30 September
2024, no drawings have been made on this facility. The Group also
has access to a £15m overdraft facility.
Maintaining a prudent
Treasury policy
SSE's
treasury policy is designed to be prudent and flexible. In line
with that, cash from operations is first used to finance regulatory
and maintenance capital expenditure and then dividend payments,
with investment and capital expenditure for growth generally
financed by a combination of cash from operations, bank borrowings
and bond issuance.
As a
matter of policy, a minimum of 50% of SSE's debt is subject to
fixed rates of interest. Within this policy framework, SSE borrows
as required on different interest bases, with financial instruments
being used to achieve the desired out-turn interest rate profile.
At 30 September 2024, 94% of SSE's borrowings were at fixed rates
(31 March 2024: 93%).
Borrowings are mainly in Sterling and Euros to reflect the
underlying currency denomination of assets and cash flows within
SSE. All other foreign currency borrowings are swapped back into
either Sterling or Euros.
Transactional foreign exchange risk arises in respect of
procurement contracts, fuel and carbon purchasing, commodity
hedging and energy portfolio management operations, and long-term
service agreements for plant.
SSE's
policy is to hedge any material transactional foreign exchange
risks using forward currency purchases and/or financial
instruments. Translational foreign exchange risk arises in respect
of overseas investments; hedging in respect of such exposures is
determined as appropriate on a case-by-case basis.
STRENGTH AND STABILITY
through medium- and long-term borrowings
The
ability to raise funds at competitive rates is fundamental to
investment. SSE's fundraising over the past five years, including
senior bonds, hybrid capital and term loans, now totals £6.6bn and
SSE's objective is to maintain a reasonable range of debt
maturities.
A key
objective of the Group's NZAP Plus five-year investment plan is to
strike the right balance between capital investment, long-term debt
issuance and securing value through disposals, all whilst
maintaining a strong net debt / EBITDA ratio. Whilst this
investment will naturally require a level of incremental debt
issuance - in addition to refinancing of existing debt - the Group
considers the plan to be fully-funded given expected continued
access to debt markets and with SSE retaining a strong investment
grade credit rating.
At 30
September 2024, the average debt maturity, excluding hybrid
securities was 7.0 years, consistent with the position at 31 March
2024.
SSE's
average cost of debt is now 4.04%, compared to 3.90% at 31 March
2024. The slight increase relates to issuing debt at higher rates
than the average cost of debt in March 2024.
Going
Concern
The
Directors consider that the Group has adequate resources to
continue in operational existence for the period to 31 December
2025. The condensed Interim Financial Statements are therefore
prepared on a going concern basis.
In
reaching their conclusion, the Directors regularly review the
Group's funding structure (see note 13 of the Interim Financial
Statements) against the current economic climate to ensure that the
Group has the short and long term funding required. The Group has
performed detailed going concern testing, including the
consideration of cash flow forecasts under stressed scenarios for
the period to December 2025.
The
Group has an established €1.5bn Euro commercial paper programme
(paper can be issued in a range of currencies and swapped into
Sterling) and as at 30 September 2024 there was £799m commercial
paper outstanding (31 March 2024: £840m). In the six months ended
30 September 2024, the Group has issued new debt instruments
totalling £0.9bn, and has redeemed £0.2bn of maturing long term
debt, while rolling £0.8bn of short term commercial
paper.
The
Group also continues to have access to its revolving credit
facilities. As at 30 September 2024 there were five committed
facilities totalling £3.5bn which were undrawn, as described in
note 13. On 23 October 2024 these facilities have been re-financed
with the £0.75m facility relating to Scottish Hydro Electric
Transmission plc being increased to £1.5bn, and the £2.75bn of
facilities relating to SSE plc and Distribution being reduced to
£1.5bn. This reduction relates to the cancellation of the £1.0bn
collateral facility due to mature in February 2025, and the £0.25bn
Distribution facility that is no longer required.
This
results in the Group having the following committed
facilities:
· a
£1.5bn revolving credit facility for SSE plc maturing October 2029
with two 1 year extension options; and
· a
£1.5bn revolving credit facility for Scottish Hydro Electric
Transmission plc maturing October 2029 with two 1 year extension
options.
The
re-financing of the committed facilities was undertaken to ensure
the Group is set up to meet its funding obligations over the next
five years, with available committed facilities on the entities
that require them. The opportunity was also taken to increase the
number of relationship banks from 11 to 15, which supports the
Group's growth plans and funding requirements over the next five
years. The £1.5bn revolving credit facility for SSE plc is in place
to provide back-up to the commercial paper programme and support
the Group's capital expenditure plans. The Scottish Hydro Electric
Transmission plc facility, was entered into to help cover the
capital expenditure and working capital of that
business.
Operating a Scrip Dividend
Scheme
SSE's
Scrip Dividend Scheme was renewed for a three-year period at the
2024 AGM. As part of the Group's dividend plan to 2026/27, take-up
from the Scrip Dividend Scheme is capped at 25%. This cap is
implemented by means of a share repurchase programme, or 'buyback',
following payment of the final dividend. The scale of any share
repurchase program would be determined by shareholder subscription
to Scrip Dividend Scheme across the full year, taking into account
the interim and final dividend elections.
Overall Scrip Dividend Scheme take-up for the 2023/24
financial year was 35.7% therefore the Group initiated a share
buy-back programme to limit the dilutive effect of the Scrip
Dividend Scheme in line with dividend plan's 25% uptake cap. This
share buy-back programme commenced on 30 September 2024 and
completed on 16 October 2024, following the repurchase of 3.8m
ordinary shares.
principal joint ventures and
associates
SSE's
financial results include contributions from equity interests in
joint ventures ("JVs") and associates, all of which are equity
accounted. The details of the most significant of these are
included in the table below. This table also highlights SSE's share
of off-balance sheet debt associated with its equity interests in
JVs which totals around £3.7bn as at 30 September 2024.
|
SSE principal JVs and
associates1
|
Asset type
|
SSE
holding
|
SSE share of external
debt
|
SSE Shareholder
loans
|
|
Marchwood Power
|
920MW
CCGT
|
50%
|
No
external debt
|
£8m
|
|
Seabank Power
|
1,234MW CCGT
|
50%
|
No
external debt
|
No
loans outstanding
|
|
Slough Multifuel
|
55MW
energy-from-waste facility
|
50%
|
No
external debt
|
£179m
|
|
Triton Power Holdings
|
1,200MW CCGT & 140MW OCGT
|
50%
|
No
external debt
|
No
loans outstanding
|
|
Beatrice Offshore Windfarm
|
588MW
offshore wind farm
|
40%
|
£590m
|
Project financed
|
|
Dogger Bank A Wind Farm
|
1,200MW offshore wind farm
|
40%
|
£928m
|
£159m
|
|
Dogger Bank B Wind Farm
|
1,200MW offshore wind farm
|
40%
|
£864m
|
Project financed
|
|
Dogger Bank C Wind Farm
|
1,200MW offshore wind farm
|
40%
|
£722m
|
Project financed
|
|
Ossian Offshore Windfarm
|
ScotWind seabed
|
40%
|
No
external debt
|
No
loans outstanding
|
|
Seagreen Wind Energy
|
1,075MW offshore wind farm
|
49%
|
£654m
|
£1,000m2
|
|
Seagreen 1A
|
Offshore wind farm extension
|
49%
|
No
external debt
|
£27m
|
|
Lenalea Wind Energy
|
30MW
onshore wind farm
|
50%
|
No
external debt
|
£14m
|
|
Clyde
Wind Farm
|
522MW
onshore wind farm
|
50.1%
|
No
external debt
|
£127m
|
|
Dunmaglass Wind Farm
|
94MW
onshore wind farm
|
50.1%
|
No
external debt
|
£47m
|
|
Stronelairg Wind Farm
|
228MW
onshore wind farm
|
50.1%
|
No
external debt
|
£89m
|
|
Cloosh Valley Wind Farm
|
105MW
onshore wind farm
|
25%
|
No
external debt
|
£24m
|
|
Neos
Networks
|
Private telecoms network
|
50%
|
No
external debt
|
£72m
|
1 Greater Gabbard, a 504MW
offshore windfarm, is proportionally consolidated and reported as a
Joint Operation with no loans outstanding.
2 For accounting purposes,
£309m of the £1,000m of SSE shareholder loans advanced to Seagreen
Wind Energy Limited have been classified as
equity.
Taxation
SSE
considers being a responsible taxpayer a core element of being a
responsible member of society. SSE seeks to pay the right amount of
tax on its profits, in the right place, at the right time, and was
the first FTSE 100 company to have been awarded the Fair Tax Mark.
October 2024 marked the tenth consecutive year that SSE has
achieved Fair Tax Mark accreditation.
While
SSE has an obligation to its customers and shareholders to manage
its total tax liability efficiently, it does not seek to use the
tax system in a way it does not consider it was meant to operate,
or use "tax havens" to reduce its tax liabilities.
SSE
understands it also has an obligation to the society in which it
operates, and from which it benefits - for example, tax receipts
are vital for the public services SSE relies upon. Therefore, SSE's
tax policy is always to operate within both the letter and spirit
of the law.
For
reasons outlined in the Alternative Performance Measures section of
this document, SSE's focus is on adjusted profit before tax, and in
line with that, SSE believes that the adjusted current tax charge
on that profit is the tax measure that best reflects underlying
performance. SSE's adjusted current tax rate for the period to 30
September 2024, based on adjusted profit before tax, is 13.4%, as
compared with 15.6% for the same period last year on the same
basis, and after discrete items. The decrease in rate is largely
driven by increased capital allowances on capital expenditure in
the period.
The
UK Spring Budget in March 2023 introduced "full expensing" for
qualifying capital expenditure incurred during the period from 1
April 2023 to 31 March 2026, that measure then being made permanent
in the November 2023 Autumn Statement. First-year capital allowance
rates of 100% and 50% replaced the existing rates of 18% and 6%
respectively for qualifying capital expenditure, significantly
increasing the amount of first-year capital allowances available on
SSE's capital investment programme.
The
UK has now introduced legislation in respect of Multinational
Top-up Tax in line with OECD BEPS pillar 2 principles. The Group
has applied the exemption from recognising and disclosing
information about deferred tax assets and liabilities related to
Pillar Two income taxes as required by the amendments to IAS 12 -
International Tax Reform-Pillar Two Model Rules, which were issued
in May 2023. The legislation will come into force for the year
ended 31 March 2025 including this interim period. Similar draft
legislation has been introduced in the Republic of Ireland and
other EU jurisdictions. The Group has undertaken modelling and does
not expect a material impact to arise as tax rates, including
deferred tax, in the countries in which the Group operates are
expected to exceed 15%.
Pensions
|
Contributing to employees'
pension schemes - IAS 19
|
September 24
£m
|
March 24
£m
|
September
23
£m
|
|
Net pension scheme asset
recognised in the balance sheet before deferred tax
£m
|
470.8
|
421.6
|
411.0
|
|
Employer cash contributions Scottish Hydro Electric scheme
£m
|
0.5
|
1.0
|
0.5
|
|
Employer cash contributions SSE Southern scheme £m
|
12.5
|
27.1
|
15.2
|
|
Deficit repair contribution included above £m
|
7.7
|
16.3
|
9.1
|
In
the six months to 30 September 2024, the surplus across SSE's two
pension schemes increased by £49.2m, from £421.6m to £470.8m,
primarily due to actuarial gains of £33.5m and contributions to the
schemes.
The
valuation of the SSE Southern scheme increased by £28.2m in the
six-month period primarily due to actuarial gains of £17.9m, driven
by the impact of higher discount rates which offset the losses on
plan assets, and contributions of £12.5m.
The
Scottish Hydro Electric Pension scheme has partially insured
against volatility in its deferred and pensioner members through
the purchase of 'buy-in' contracts meaning that the Group only
retains exposure to volatility in active employees. During the
period the scheme's surplus increased by £21.0m. This increase was
also mainly driven by the impact of higher discount rates which
offset the losses on plan assets.
Additional information on employee pension schemes can be
found in Note 17 to the Interim Financial Statements.
SUSTAINABILITY SUMMARY
|
Performance against 2030
Goals
|
Sep 2024
|
Mar 2024
|
Sep 2023
|
|
Cut carbon intensity by
80%
|
|
|
|
|
- Scope 1 GHG intensity (gCO2e/kWh)
|
207
|
205
|
232
|
|
Increase renewable energy
output fivefold
|
|
|
|
|
- Renewable generation output (TWh)
|
5.4
|
11.2
|
3.8
|
|
Enable low-carbon generation
and demand
|
|
|
|
|
- Renewables connected in SSEN Transmission network
area (GW)1
|
10.6
|
9.3
|
9.2
|
|
Champion a fair and just
energy transition
|
|
|
|
|
- Contribution to GDP UK and Ireland (£bn /
€bn)2
|
-
|
5.96/1.06
|
-
|
|
- Jobs supported in UK and
Ireland2
|
-
|
53,230/3,270
|
-
|
1 Includes SSE Renewables
total output inc. pumped storage, battery, and constrained off wind
in GB, as well as biomass asset in Enterprise
2 Direct, indirect and
induced Gross Value Added and jobs supported, from PwC
analysis
|
Safety
Performance
|
Sep 2024
|
Mar 2024
|
Sep 2023
|
|
Total
Recordable Injury Rate per 100k hours worked (SSE and
contractors)
|
0.16
|
0.20
|
0.24
|
providing profitable
solutions for people and planet
Due
to the essential nature of SSE's activities, sustainability has
naturally been a long-standing feature of its business model,
embedded at the heart of its strategy. It provides a framework that
guides decisions as it transitions to net zero, ensuring it is done
in a way that creates and shares value with
stakeholders.
Sustainability is articulated at the highest level, with
SSE's business strategy aligned to the UN's Sustainable Development
Goals (SDGs). To embed this approach throughout the organisation,
SSE has identified four SDGs which are highly material to the
business, and to which it has linked its four core business goals
for 2030. These 2030 Goals are focused on addressing the challenge
of climate change in a way that is fair to working people,
consumers and communities.
MEASURING
PERFORMANCE
The
scope 1 GHG intensity of
electricity generated in the six months to 30 September 2024
fell to 207gCO2e/kWh from 232gCO2e/kWh in the same period in 2023.
Increased generation output from renewables as a result of more
favourable weather conditions and additional capacity, combined
with stable emissions arising from thermal generation drove the
improvement in scope 1 GHG intensity performance.
Renewable
output was 45% higher
period-on-period, driven by incremental operating capacity and more
favourable weather conditions. Operational capacity increased
following the delivery of the Viking Wind Farm on Shetland in
August 2024 and SSE Renewables' first battery energy storage system
(BESS) in April 2024. Additionally, the period benefited from a
full contribution from Seagreen Offshore Windfarm.
As of
30 September 2024, the total
installed renewable capacity connected to SSE's north of Scotland
Transmission network is 10.6GW, exceeding the business'
RIIO-T2 goal to deliver a network in the north of Scotland with the
capacity and flexibility to accommodate 10GW of renewable
generation by 2026, following the connection of several large
renewable schemes in 2024/25.
SSE's
combined SSE employee and contractor Total Recordable Injury Rate fell to
0.16 from 0.24 in the prior period, benefiting from a >30%
improvement in contractor injury rates. SSE's new immersive
training facility represents a major investment in safety with over
6,000 employees and partners trained since April 2024, contributing
to better safety behaviours.
Further information on SSE's progress towards its SDG-aligned
2030 Business Goals can be found in the Half Year Sustainability
Statement published here: www.sse.com/sustainability/reporting/
BUSINESS OPERATING REVIEW
SSEN
Transmission
SSEN
Transmission owns, operates and develops the high voltage
electricity transmission system in the north of Scotland and its
islands. Following a minority stake sale completed in November
2022, the business is owned 75% by SSE plc and 25% by Ontario
Teachers' Pension Plan Board. All references to performance
indicators relate to 100% of the business unless otherwise
stated.
|
Key Performance
Indicators
|
September
24
|
September
23
|
|
Transmission adjusted operating profit1 -
£m
|
157.5
|
215.6
|
|
Transmission reported operating profit - £m
|
210.0
|
287.3
|
|
Transmission adjusted investment and capital
expenditure1 - £m
|
376.6
|
242.6
|
|
Gross
Regulated Asset Value (RAV) - £m2
|
6,359
|
5,289
|
|
SSE
Share Regulated Asset Value (RAV)1,2 - £m
|
4,769
|
3,967
|
|
Renewable Capacity connected within SSEN Transmission area -
MW3
|
10,610
|
9,217
|
1 Excludes 25% minority
interest
2 Estimated and subject to
outturn of annual regulatory process
3 Transmission and
distribution connected capacity within the SSEN Transmission
Network area, includes pumped storage and battery
storage.
For financial performance
commentary please refer to the Group Financial
Review.
Operational delivery -
RIIO-T2
SSEN
Transmission continued to deliver a strong operational performance
in the first half of 2024/25 and is on track to achieve the maximum
annual RIIO-T2 reward available through the 'Energy Not Supplied
Incentive', which would equate to £0.8m in 2018/19 prices. This
performance is underpinned by a robust and ongoing programme of
inspection, maintenance, refurbishment and replacement of assets,
supporting GB security of supply.
Capital investment
programme
The
RIIO-T2 capital investment programme continues, with progress being
made across major projects. As of 30 September 2024, the total
installed capacity of the north of Scotland network was almost
11.9GW, of which just over 10.6GW is from renewable and other low
carbon sources - including 0.6GW of pumped storage and
batteries.
This
connected capacity is enough to power 12.3m homes, meaning the
business has achieved its RIIO-T2 goal to transport the renewable
electricity that powers 10m homes, two years early.
A key
part of this was delivered in the period with the completion of the
Shetland High Voltage Direct Current (HVDC) link, which was fully
energised in August, capable of transporting enough clean energy to
power 500,000 homes. Delivered on time and on budget, this landmark
project connects Shetland to the GB transmission grid for the first
time, via the first multi-terminal HVDC switching station of its
kind installed anywhere in Europe.
Work
has also progressed to connect Shetland's existing electricity
distribution network to the Shetland HVDC link, connecting
Shetland's homes and business to the GB electricity network for the
first time via the new Grid Supply Point being constructed at
Gremista. The Kergord-Gremista 132kV circuits will then connect the
HVDC link to the new Gremista Grid Supply Point. The project
remains on track to be complete by the end of
2025.
Work
to incrementally increase the voltage in the north-east Scotland
transmission network to 400kV continues with the next phase due to
be completed towards the end of 2026. Further 400kV infrastructure
is expected to enter construction as part SSEN Transmission's
Accelerated Strategic Transmission Investment (ASTI) projects, from
2026 onwards.
Other regulatory
investments
The
business has secured regulatory approvals required to take forward
several major investments over and above its baseline RIIO-T2
investment plan.
Through Ofgem's Large Onshore Transmission Investment (LOTI)
Uncertainty Mechanism, SSEN Transmission is currently progressing
three projects with an estimated gross nominal investment of around
£3bn. To accelerate the regulatory process and facilitate delivery
of the offshore and onshore network reinvestments required for the
energy transition, Ofgem introduced the ASTI regulatory framework
in December 2022 with SSEN Transmission currently progressing eight
projects through that framework with an estimated gross nominal
investment of around £17bn.
LOTI
projects
In
September, construction began on the Orkney-Caithness transmission
link. The link will transport around 220MW of renewable electricity
generation and full energisation is anticipated in 2028.
For
the Skye reinforcement project, which will see the replacement and
upgrade of the existing Fort Augustus to Skye transmission line, a
decision on the Section 37 overhead line planning application is
expected during the remainder of 2024, following both substation
applications being granted consent by the Highland Council at the
start of 2024. Construction work is ready to begin, and full
energisation is targeted towards the end of 2028.
In
September 2024, Scottish Ministers granted consent for the final
major elements of the Argyll and Kintyre 275kV upgrade. Substation
construction work is under way, and overhead line preparatory work
has started too, with full energisation expected during
2029.
ASTI
projects
SSEN
Transmission's eight ASTI projects include overhead line and
substation installations as well as subsea cables to support the
connection of offshore wind and onshore electricity generation,
namely:
· Onshore (all wholly owned): Beauly-Spittal, Beauly-Peterhead,
Beauly-Denny upgrade and Kintore-Tealing
· Offshore wholly owned: Western Isles Link and
Spittal-Peterhead
· Offshore jointly-developed with National Grid: Eastern Green
Link 2 (EGL2) and Eastern Green Link 3 (EGL3)
The
EGL2 project - which will see the installation of a 2GW electricity
transmission subsea superhighway between the north east of Scotland
and Yorkshire - has made progress during the year with all
approvals in place, supply chain secured and final cost approval
confirmed by Ofgem in August 2024. Onshore works are now under
way at either end of the HVDC link and the project is
on track for completion in 2029.
Work
to progress EGL3 - which will see the installation of a 2GW subsea
HVDC between the north east of Scotland and south Lincolnshire/West
Norfolk - continues to progress with the supply chain engaged in
the tender process.
In
what is one of the biggest consultations that Scotland has ever
seen, SSEN Transmission has carried out over 230 public events
across its ASTI projects, gathering community feedback to shape its
plans. Consultation will continue throughout the rest of 2024 and
into 2025 in advance of submitting consent applications.
To
support the timely delivery of ASTI and all future projects, SSEN
Transmission is actively advocating for a maximum 12-month
determination of all Section 37 overhead line planning
applications. This is in line with the recommendations of the UK
Government's Electricity Networks Commissioner, and others. In
October 2024, the UK Government, in collaboration with the Scottish
Government, published a consultation reviewing the consenting
process for Electricity Infrastructure in Scotland. The
consultation, which seeks to modernise and streamline consenting in
Scotland, builds on the Scottish Government's Green Industrial
Strategy, which includes the ambition for 12-month consent
determinations.
RIIO-T3 price
control
In
July, Ofgem published its Sector Specific Methodology Decision
(SSMD), an important step in the RIIO-T3 regulatory price control
process covering the period between 2026 and 2031.
While
the signals from Ofgem to support investment in the SSMD were
positive, the unprecedented level of investment required to deliver
SSEN Transmission's ~£20bn of LOTI and ASTI projects, as well as
baseline RIIO-T3 spend, means the final RIIO-T3 framework must be
attractive to both equity and debt providers. SSEN Transmission
will work constructively with Ofgem and wider stakeholders to
ensure the future regulatory framework provides the flexibility and
agility required to deliver the unprecedented level of required
investment. Work progresses to develop the SSEN Transmission
Business plan, which is scheduled for submission to Ofgem by 11
December 2024.
Future growth
opportunities
In
August, Ofgem published a consultation on the NESO's Beyond 2030
report, the second transitional Centralised Strategic Plan. For the
north of Scotland, the NESO's plan confirms the need for a number
of projects to proceed now for delivery by 2035, which combined
represent a potential estimated gross investment of over £5bn for
SSEN Transmission.
Ofgem's consultation has provisionally approved the need for
four major investments in upgraded and new infrastructure in the
north of Scotland, including a second HVDC link to Shetland. Ofgem
has also provisionally identified SSEN Transmission as the delivery
body for three of the four projects, exempting them from
competition, with a decision on the fourth expected around the end
of the year.
Further investment beyond the Pathway to 2030 is required to
unlock the north of Scotland's full renewable potential and to
deliver energy security and net zero targets.
SSEN
DISTRIBUTION
SSEN
Distribution, operating under licence as Southern Electric Power
Distribution plc (SEPD) and Scottish Hydro Electric Power
Distribution plc (SHEPD), is responsible for safely and reliably
maintaining the electricity distribution networks supplying over
3.9m homes and businesses across central southern England and the
north of Scotland. SSEN Distribution's networks cover the greatest
land mass of any of the UK's Distribution Network Operators
spanning over 75,000km² of extremely diverse terrain. The business
has significant growth opportunities as a key enabler of the local
and national transition to a net zero future.
|
Key Performance
Indicators
|
September
24
|
September
23
|
|
Distribution adjusted and reported operating profit -
£m
|
346.3
|
120.1
|
|
Regulated Asset Value (RAV) - £m
|
5,528
|
5,138
|
|
Distribution adjusted investment and capital expenditure -
£m
|
296.2
|
245.5
|
|
Electricity Distributed - TWh
|
12.0
|
16.7
|
|
Customer minutes lost (SHEPD) average per customer
|
31
|
28
|
|
Customer minutes lost (SEPD) average per customer
|
27
|
27
|
|
Customer interruptions (SHEPD) per 100 customers
|
28
|
25
|
|
Customer interruptions (SEPD) per 100 customers
|
22
|
26
|
RAV, Customer minutes lost
and Customer interruptions figures estimated and subject to outturn
of annual regulatory process
For financial performance
commentary please refer to the Group Financial
Review.
Operational delivery -
RIIO-ED2
SSEN
Distribution is mid-way through the second year of the RIIO-ED2
price control, which runs until March 2028. This secured £3.6bn of
baseline expenditure, an increase of 22% on the previous price
control, and there is further opportunity to trigger up to £0.7bn
in additional funding under Uncertainty Mechanisms to meet new
demand and generation growth, and to improve subsea cable
connections to Scotland's islands.
SSEN
is continuing to deliver this plan at pace, engaging with
Government and the Regulator to ensure that the agility within the
price control is fully maximised to deliver on the recently
accelerated timescales for clean power delivery. This approach
balances network optimisation through expanding capabilities in
local flexibility with growing the asset base to underpin the net
zero transition, thus increasing long-term Regulatory Asset Value
(RAV). Targeted improvements in performance and efficiency are also
being made while retaining a core focus on delivery of business
plan outputs.
Improving customer
performance
Targets for improving service levels for customers are set
through the regulatory framework. In RIIO-ED2, the performance
required to secure higher incentive rewards has been tightened.
Within the Interruptions Incentive Scheme (IIS), SSEN is offered an
incentive on its performance against the loss of supply, through
the recording of the number of Customer Interruptions (CI) and
Customer Minutes Lost (CML). These include both planned and
unplanned interruptions.
SEPD
has seen an 18% improvement in its Customer Interruption (CI)
performance with Customer Minutes Lost (CML) performance remaining
stable. SHEPD's CI performance declined by 12% compared with the
same point last year with its CML performance declining by 11%. The
improvements in SEPD reflect progress in defect removal, the
installation of more automation, and more recruitment and training
of new colleagues to carry out routine maintenance and tree
cutting. In SHEPD, poor weather throughout the summer - which did
not qualify as exceptional under IIS provisions - contributed to
network performance.
SHEPD's Customer Satisfaction Score increased by 1% in the
first half of this financial year; in SEPD it decreased by 2.5%.
Delivering improvements to customer satisfaction is a key focus for
the business, and the 'Perform' programme is reorganising the
Operations division in central southern England. This is beginning
to deliver performance improvements, including a 24% increase in
the number of network jobs completed per day.
Capital investment
programme
Following £505.1m of investment and capital expenditure in
2023/24, SSEN Distribution's capital investment programme continues
to accelerate, with £296.2m being invested in the year to date - a
£50.7m increase on the same period last year. At one of the Grid
Supply Points (GSPs) in Iver in West London, delivery is currently
underway on a £175m upgrade, which will remove fault level
constraints, accommodate connections for new customers, and improve
operational flexibility. In the SEPD licence area, frameworks worth
>£1bn have been agreed with delivery partners which will bring
benefits to customers and create capacity for new connections. A
similar programme for the SHEPD licence area will result in tenders
being awarded in the coming months.
Other regulatory
investments
In
total, more than £130m of Uncertainty Mechanism spend has so far
been approved or minded-to approved by Ofgem in the RIIO-ED2 price
control period, with the majority of potential additional funding
becoming eligible for triggering later in the price
control.
Ofgem
is assessing SSEN's plans for the Shetland Standby Project under
the Shetland Enduring Solution reopener. A draft determination
published in September 2024 proposed that the reopener would be
funded in line with SSEN's request of £27m for the rest of the
current price control period. This follows proactive work with
stakeholders and the regulator to prepare a robust, evidence-based
submission. The final decision is expected in winter
2024.
Looking further ahead to load-related Uncertainty Mechanisms
which will open for submissions in January 2025, SSEN Distribution
is taking an approach which seeks to invest proactively and
strategically to meet generation and demand needs to
2050.
Leading on the future
system
SSEN
Distribution has become the first Distribution Network Operator to
publish Strategic Development Plans, setting out a regional view of
expected generation and demand growth and related network
investment need in stages to 2050. These are now being produced for
each Grid Supply Point (GSP) and the area it serves. They will act
as blueprints for optimal investment and provide evidence to Ofgem
on the feasibility of plans and the cost to consumers.
SSEN's strong support for net zero planning at a local level
is borne out by proactive relationships with local authorities.
This is epitomised by SSEN's sector-leading Local Energy Net Zero
Accelerator (LENZA) application. LENZA is a geospatial planning
tool, which empowers local authorities to make effective net zero
plans and provides robust evidence for the regulatory funding of
future investment.
SSEN
Distribution remains at the forefront of the development of new
flexible electricity systems. In this year's Ofgem Distribution
System Operator (DSO) Performance Panel, SSEN scored well and
secured an upper-tier incentive return of £2.2m.
SSEN
Distribution also continues to increase the tendering of
Flexibility Services in areas where localised high demand can be
offset to extend overall network capacity. SSEN recently launched a
new Flexibility Market Platform and has signed 19 new Overarching
Agreements with 12 different companies. A total of 20 different
companies are now on a Flexibility Service Contract and the
business has already sought the procurement of a further 367MW this
year, adding to the 703MW of flexibility services contracted during
2023/24.
SSE
Renewables
SSE
Renewables is a leading developer and operator of renewable energy
generation, focusing on onshore and offshore wind, hydro, solar and
battery storage. The business' core focus is on the UK and Ireland,
with a growing presence in carefully selected international
markets, and comprises c2,100 renewable energy professionals
predominately based across the UK and Ireland with a growing
presence in Continental Europe and Japan.
|
Key Performance
Indicators
|
September
24
|
September
23
|
|
Renewables adjusted operating profit - £m
|
335.6
|
86.8
|
|
Renewables reported operating profit - £m
|
270.5
|
18.3
|
|
Renewables adjusted investment & capital expenditure
before acquisitions - £m
|
491.9
|
447.1
|
|
Generation capacity -
MW
|
|
|
|
Onshore wind capacity (GB) - MW
|
1,728
|
1,285
|
|
Onshore wind capacity (NI) - MW
|
117
|
117
|
|
Onshore wind capacity (ROI) - MW
|
581
|
567
|
|
Total onshore wind capacity
- MW
|
2,426
|
1,969
|
|
Offshore wind capacity (GB) - MW
|
1,014
|
1,014
|
|
Conventional hydro capacity (GB) - MW
|
1,160
|
1,159
|
|
Pumped storage capacity (GB) - MW
|
300
|
300
|
|
Battery capacity (GB) - MW
|
50
|
-
|
|
Total renewable generation
capacity (inc. pumped storage) - MW
|
4,950
|
4,442
|
|
Contracted capacity
|
3,458
|
3,015
|
|
Generation output - GWh
(including compensated constraints)
|
|
|
|
Onshore wind output (GB) - GWh
|
1,720
|
1,060
|
|
Onshore wind output (NI) - GWh
|
84
|
97
|
|
Onshore wind output (ROI) - GWh
|
516
|
532
|
|
Total onshore wind output -
GWh
|
2,320
|
1,689
|
|
Offshore wind output (GB) - GWh
|
1,715
|
1,006
|
|
Conventional hydro output (GB) - GWh
|
1,194
|
884
|
|
Pumped storage output (GB) - GWh
|
151
|
144
|
|
Battery output (GB)-GWh
|
21
|
-
|
|
Total renewable generation
(inc. pumped storage & battery) - GWh
|
5,401
|
3,723
|
1. Capacity and output
based on 100% of wholly owned sites and share of joint
ventures
2. Total renewable
generation capacity is increased by 508MW. This principally
reflects 443MW from Viking wind farm fully operational August 2024
and 50MW from Salisbury BESS completed in April
2024.
3. Contracted capacity
includes sites with a CfD, eligible for ROCs, or contracted under
REFIT (CfD contracts may be still to commence)
4. Onshore GB wind output
includes 420GWh of compensated constrained off generation in
HY2024/25 and 272GWh in HY2023/24; Offshore GB wind output includes
731GWh of compensated constrained off generation in HY2024/25 and
62GWh in HY2023/24
5. Biomass capacity of 15MW
and output of 28GWh in HY2024/25 and 37GWh HY2023/24 is excluded,
with the associated operating profit or loss reported within SSE
Enterprise
For financial performance
commentary please refer to the Group Financial
Review.
Operational
delivery
In
onshore, operational performance was strong across the portfolio
with higher-than-average wind speeds, especially in late summer.
Total volumes to September were 2,320GWh, significantly higher than
prior year volume of 1,689GWh. This was a result of wind resource
for the period combined with Viking entering into operations. Asset
availability remained high with planned maintenance campaigns
delivered on time.
In
offshore, Beatrice (588MW, SSE share 40%), Greater Gabbard (504MW,
SSE share 50%) and Seagreen (1,075MW, SSE share 49%) all performed
in line with, or better than, expectations. Beatrice was impacted
by transmission outages for tie-in works, but this was offset by a
combination of high availability and better than forecast wind
resource. Greater Gabbard also enjoyed increased turbine
availability, although export capability has recently been impacted
due to a switchgear failure for which a resolution is in progress.
Seagreen performed well in its first full year of operation with
higher than anticipated wind resource and good availability
delivering above expectation.
In
hydro, operational performance was strong in the first six months
of the financial year with production of 1,194GWh, higher than
prior period volume of 884GWh. At Foyers, plant availability was
good at 85%.
Delivering world-class
assets
Onshore, a landmark milestone was achieved with the
completion of Viking wind farm (443MW) in Shetland in August 2024
achieved on time and on budget, with the project supporting around
35 full time jobs in addition to a community fund that is expected
to contribute more than £70m to the local Shetland economy over its
lifetime. Construction is substantially complete at Yellow River
(101MW) in Ireland with first power expected before the end of
2024, supporting commercial operations in spring 2025. Export will
be via a temporary connection prior to transfer to a permanent
connection, expected in late 2025.
Offshore, installation and commissioning work resumed on the
turbines at Dogger Bank A in late August, following recent blade
failures on the Haliade-X turbine. It is expected Dogger Bank A
will reach completion within the second half of calendar year 2025.
This expected completion date reflects the delay resulting from
additional quality assurance procedures and remedial works put in
place by GE Vernova.
On
Dogger Bank B, the interarray cable lay has commenced, and all
monopiles and transition pieces have been produced with around 85%
installed. At Dogger Bank C, offshore substation platform
completion work is ongoing and onshore converter station
construction continues to progress. It is anticipated that there
will be a knock-on effect for turbine installations at both Dogger
Bank B and C as a consequence of the delays on Dogger Bank A. The
delays are not expected to materially impact Dogger Bank's equity
returns across all three phases, which remain comfortably above
SSE's offshore wind hurdle rate.
In
hydro, SSE Renewables completed the refurbishment of its Tummel
Bridge power station in August 2024, increasing the station's
potential output to 34-40MW and extending its life by 30 years. The
business is also carrying out other improvement works on hydro
assets to maximise run-off, storage and optimisation
benefits.
SSE
Renewables reached FID on its first onshore wind projects in Italy,
Castel Favorito and Masseria la Cattiva (together 17MW), in the
Puglia region. Construction is due to begin in by the end of 2024
and COD is expected in 2026. Construction continues on SSE
Renewables' first French onshore wind farm, Chaintrix (c.28MW),
with all turbines now installed, first power achieved and
commercial operations expected in early 2025.
Growth opportunities - GB
& Ireland
In
September 2024, SSE Renewables' Cloiche wind farm (130.5MW),
located in the Scottish Highlands, was successful in the UK's sixth
Contract for Difference (CfD) Allocation Round. It will receive a
guaranteed strike price of £50.90/MWh, based on 2012 prices but
annually indexed since then for CPI inflation, for a 15-year period
from the 2027/28 delivery year. A final investment decision is
expected in 2025.
In
Ireland, SSE Renewables was successful in securing a 16.5-year
contract for Drumnahough wind farm (60MW, SSE share 50%) in the
fourth round of the Renewable Electricity Support Scheme auction,
where the average weighted bid price was €90.47/MWh for onshore
wind.
In
June, SSE Renewables submitted an offshore planning consent
application for the offshore infrastructure required for its
proposed Arklow Bank Wind Park 2 project (800MW) in the Irish Sea.
With consent secured for the operations and maintenance base and
for the onshore cabling and substation, this marks the third and
final planning consent required to move to the construction stage
of the project.
SSE
Renewables added to its grid-scale battery storage projects with
the acquisition of a consented battery energy storage system (BESS)
- Thornberry BESS (120MW/240Mwh in Co Offaly). Subject to reaching
FID, Thornberry could be operational by the end of the
decade.
In
October 2024, the UK Government confirmed it will introduce a cap
and floor scheme for long-duration electricity storage, a mechanism
which SSE has long called for to support pumped hydro storage. The
scheme will open to applications in 2025. SSE Renewables hopes to
make a final investment decision on Coire Glas (c.1,300MW) subject
to a timely process and being successful in the administrative
allocation of an investable mechanism.
Growth opportunities -
International
Continental
Europe
In
the Netherlands, SSE Renewables was successful in securing the
Alpha site (2GW, SSE share 50%) in the Dutch Government's Ijmuiden
Ver zone tender, with its joint venture partner APG (acting on
behalf of Dutch pension fund ABP). The award is for a pre-developed
and fully consented offshore wind site in the North Sea, with a
40-year lease period (€1m annual payment). Subject to reaching FID,
expected by late 2025, the wind farm would be commissioned by the
end of the decade.
Japan
In
June, a consortium including SSE's joint ownership company, SSE
Pacifico (80% stake), was awarded funding from the Japanese
Government for a c.30MW floating offshore wind demonstration
project in Japan. If it proceeds to construction, the project would
be one of the deepest offshore development sites in the world at
depths of up to 400m.
SSE
Thermal
SSE
Thermal owns and operates conventional flexible thermal generation
in GB and Ireland, whilst actively exploring opportunities for
growth in technologies such as carbon capture and storage (CCS) and
hydrogen power generation. SSE Thermal's flexible and efficient
fleet of gas-fired generation will continue to play a critical role
in the transition to net zero, providing reliable back-up power and
complementing renewable energy.
|
Key Performance
Indicators
|
September
24
|
September
23
|
|
Thermal adjusted operating (loss)/profit - £m
|
(9.0)
|
312.9
|
|
Thermal reported operating (loss)/profit - £m
|
(6.3)
|
234.6
|
|
Thermal adjusted investment and capital expenditure, before
acquisitions - £m
|
46.4
|
38.2
|
|
Generation capacity -
MW
|
|
|
|
Gas-
and oil-fired generation capacity (GB) - MW
|
5,538
|
5,538
|
|
Gas-
and oil-fired generation capacity (ROI) - MW
|
672
|
672
|
|
Energy from waste capacity (GB) - MW
|
28
|
0
|
|
Total thermal generation
capacity - MW
|
6,237
|
6,210
|
|
Generation output -
GWh
|
|
|
|
Gas-
and oil-fired output (GB) - GWh
|
6,295
|
6,099
|
|
Gas-
and oil-fired output (ROI) - GWh
|
640
|
921
|
|
Energy from waste output (GB) - GWh
|
22
|
0
|
|
Total thermal generation -
GWh
|
6,957
|
7,020
|
1 Capacity is wholly owned
and share of joint ventures, and reflects Transmission Entry
Capacity
2 Output is based on SSE
100% share of wholly owned sites and 100% share of Marchwood PPAs
due to the contractual arrangement.
3 Output in GB in six
months to September 2024 excludes 20GWh of pre-commissioning output
from Slough Multifuel which commissioned August
2024.
For financial performance
commentary please refer to the Group Financial
Review.
Operational
delivery
The
role of thermal plant has changed materially over the last two
years. Its value to the market is increasingly to provide back-up
reserve to the renewables led system (remunerated through the
Capacity Mechanism) and then to provide flexible response as
overall UK balances change. Increasingly this means that the value
of the intrinsic baseload spark spread is less relevant to Thermal
revenues, and value is accrued through the Capacity Mechanism,
offering the National Energy System Operator services though the
Balancing Mechanism and other ancillary contracts and then through
trading the option value of the assets.
At
all times the Thermal portfolio offers the wider group protection
from price spikes, renewables shortfall or asset availability
issues and therefore has material risk management value to the
Group.
In
the first six months of 2024/25, the SSE Thermal fleet delivered
strong commercial availability - availability when the market
requires flexible power generation - despite planned outages at
Keadby 2, Great Island and Seabank extending beyond the original
schedule.
Slough Multifuel completed its first full month of commercial
operation, delivering incremental value to the business, although
also affected by low GB power prices. Slough Multifuel's 15-year
Capacity Market agreement commenced on 1 October 2024.
Lower
spark spreads have also been seen in Ireland, as continued strong
demand in a tight Irish system has been offset by increased CCGT
capacity available to the market. Whilst period-on-period output
from Great Island has been lower than expected due to an extended
outage, since full return to service in August it has run
predominantly baseload.
Managing availability responsibly, both within year and
taking a view of future system needs, continues to be a priority
for SSE Thermal. This is being considered when setting out the
approach to maintenance programmes - planning across multiple years
and portfolio-wide to build in additional resilience, with the
older existing assets (Keadby 1, Medway and Peterhead) now expected
to play an important role on the system for longer than originally
anticipated, and at least to 2030.
Construction
programme
In
August, the construction and commissioning of Slough Multifuel was
completed, with the site handed to commercial operations. The build
of the 55MW energy-from-waste plant began in May 2021 with the
project - a 50/50 JV with Copenhagen Infrastructure Partners -
being delivered ahead of schedule and on budget.
In
Ireland, construction of a Temporary Emergency Generation unit at
Tarbert is nearing completion. The 150MW emergency capacity, being
delivered at the request of Irish authorities, is now scheduled to
be available by the end of 2024. Under legislation from the Irish
Government, it will cease operations when the temporary electricity
emergency has been addressed and no later than March 2028. Until
then, it would only be utilised when it is clear that
market-sourced generation will not be sufficient to meet system
needs and with a maximum running time of 500 hours per
year.
Growth
opportunities
Strong progress is being made on SSE Thermal's proposed new
power stations in Ireland which would run on 100% sustainable
biofuels. In October 2024, SSE Thermal received planning consent
from An Bord Pleanála for the 300MW Tarbert Next Generation Power
Station in County Kerry. A planning decision is expected soon from
An Bord Pleanála on the 170MW Platin Power Station in County Meath.
A final investment decision is targeted by the end of 2024 for the
projects, both of which hold 10-year capacity agreements due to
commence in the 2026/2027 delivery year.
In
GB, SSE Thermal is actively developing two new flexible power
stations at its Keadby and Ferrybridge sites. The up to 910MW (SSE
share 50%) Keadby Next Generation Power Station and up to 1.2GW
Ferrybridge Next Generation Power Station would be 'dual fuel' in
nature, allowing them to run on natural gas before converting to
hydrogen once the necessary transport and storage infrastructure
has been deployed. SSE Thermal is taking this approach to minimise
the risk of carbon lock-in, while recognising that progress to
decarbonise flexible generation in the GB power system has been
slower than anticipated and there is a need for additional flexible
capacity on the system over the coming decade.
As
part of its strategy to unlock hydrogen, SSE Thermal is also
continuing development on multiple hydrogen production projects. It
has partnered with EET Hydrogen on Gowy Green Hydrogen, a proposed
40MWe green hydrogen production facility in Cheshire. Planning
activity is expected to commence for Gowy Green Hydrogen and the
H2NorthEast blue hydrogen production project, a joint venture with
Kellas Midstream located in Teesside, in 2025.
A
planning application has been submitted for Aldbrough Hydrogen
Pathfinder, a first-of-a-kind project which would unite hydrogen
production, storage and power generation in one location by 2028.
The project has also been entered into the Government's HAR2
allocation round, with progress expected in spring 2025.
The
UK Government is expected to unveil next steps for deployment of
carbon capture technology in Scotland and the Humber in the Spring
of 2025, following its £22bn commitment to CCS in October 2024. It
is anticipated this will open opportunities for SSE Thermal's
Peterhead Carbon Capture and Keadby Carbon Capture to receive
Dispatchable Power Agreements and help to deliver the UK
Government's clean energy ambitions.
Gas
Storage
SSE
holds around 40% of the UK's conventional underground gas storage
capacity at two sites on the east Yorkshire coast. The Atwick
facility, near Hornsea, is wholly-owned by SSE, while the Aldbrough
facility is operated as a joint venture with Equinor. These two
sites offer flexibility and hedging services to the UK and
interconnected gas markets. As part of the transition to net zero,
opportunities to convert gas storage facilities to store low-carbon
hydrogen, which can be used to decarbonise power generation,
industry, heat, transport and other key sectors are being
explored.
|
Key Performance
Indicators
|
September
24
|
September
23
|
|
Gas
Storage adjusted operating loss- £m
|
(34.8)
|
(86.7)
|
|
Gas
Storage reported operating (loss) / profit - £m
|
(34.8)
|
(91.3)
|
|
Gas
storage adjusted investment and capital expenditure - £m
|
0.9
|
0.2
|
|
Gas
storage level at period end - mTh
|
117
|
109
|
|
Gas
storage level at period end - %
|
62
|
58
|
For financial performance
commentary please refer to the Group Financial
Review.
Operational
delivery
SSE's
Gas Storage business continues to respond to market needs,
optimising assets to help ensure security of gas supply for the UK
whilst providing important liquidity to the market. These assets
are an important risk management tool for the Group's generation
portfolio. They offer short-notice flexibility as a result of their
technical ability to cycle quickly and mitigate exposures from wind
speeds and demand variability.
The
patterns of operation give rise to seasonal variations in financial
performance depending on the market dynamics. The gas markets have
demonstrated limited volatility in the first half of the year, with
minimal spread between summer and winter prices.
Third
party contracts have been secured with three customers for
injection and withdrawal, locking in value for the assets while
maintaining the ability to trade the remaining capacity.
Availability at Atwick was limited from August to October for
planned maintenance intervention on Cavern Three and work to
maintain operability of the compressors. The site reached full
injection capacity in October. At Aldbrough, all caverns provided
strong injection and withdrawal availability across the
period.
Growth
opportunities
Good
progress was made by the UK Government on the development of the
Hydrogen Storage Business Model in the early part of the year.
Despite slower progress since the new Government took office, DESNZ
still recognises the strategic importance of hydrogen storage to
cost-effective deployment of a hydrogen economy. SSE Thermal
expects that the allocation processes for hydrogen transport and
storage support will progress in 2025.
Aldbrough Hydrogen Storage, which SSE is developing in
partnership with Equinor, remains well placed to enter this process
and be part of a broader Humber Hydrogen Hub that could link
Aldbrough, Saltend and Easington into a regional hydrogen network.
Preparation to submit a planning application for Aldbrough Hydrogen
Storage continues, with statutory consultation
completed.
Energy Customer
Solutions
SSE
Business Energy in Great Britain (non-domestic) and SSE Airtricity
on the island of Ireland (domestic and non-domestic) provide a
shopfront and route to market for SSE's generation, renewable green
products and low-carbon energy solutions. Across Great Britain and
the island of Ireland, the primary focus has been on supporting
customers, modernising systems and expanding the green energy and
low carbon product offerings to enable customers to reduce their
energy consumption and carbon emissions.
SSE Business
Energy
|
Key Performance
Indicators
|
September
24
|
September
23
|
|
SSE
Business Energy adjusted & reported operating profit -
£m
|
60.1
|
88.0
|
|
Electricity Sold - GWh
|
4,895
|
5,203
|
|
Gas
Sold - mtherms
|
46.1
|
60.8
|
|
Aged
Debt (60 days past due) - £m
|
356.8
|
230.3
|
|
Bad
debt expense - £m
|
17.1
|
56.6
|
|
Energy customers' accounts - m
|
0.34
|
0.41
|
For financial performance
commentary please refer to the Group Financial
Review.
Operational
delivery
Connecting customers with SSE's renewable assets continues to
be a core focus for the business, with additional corporate
customers successfully securing CPPA products during the period.
Delivery of the Smart programme continues, with the business
expected to exceed its target by year-end.
Under
the SSE Energy Solutions brand, the business continues to deliver
transformative decarbonisation projects through a range of public
and private sector partnerships. SSE Energy Solutions' partnership
with Ortus Energy includes the acquisition of 13MW of existing
rooftop solar assets and the option to finance up to 130MW of
future solar projects over the next three years, providing future
growth opportunities and optionality around developing new customer
propositions.
Following the implementation of a new customer management
system, focus has been on fully integrating the new system to
deliver an improved customer experience and increased capability
for a broader offering.
SSE
Airtricity
|
Key Performance
Indicators
|
September
24
|
September
23
|
|
Airtricity adjusted operating profit - £m
|
70.6
|
5.8
|
|
Airtricity reported operating profit - £m
|
70.6
|
5.3
|
|
Aged
Debt (60 days past due) - £m
|
19.7
|
19.8
|
|
Bad
debt expense - £m
|
2.1
|
5.4
|
|
Airtricity Electricity Sold - GWh
|
3,152
|
3,110
|
|
Airtricity Gas Sold - mtherms
|
85.3
|
67.0
|
|
All
Ireland energy market customers (Ire) - m
|
0.79
|
0.74
|
For financial performance
commentary please refer to the Group Financial
Review.
Operational
delivery
During the first half of this year, Airtricity continued to
support domestic customers through tariff reductions on three
consecutive occasions and ongoing discretionary supports. Higher
customer numbers and higher volumes contributed to a return to
profitability. SSE Airtricity also launched its £5m Generation
Green Community Fund in May which will deliver funding for
sustainable initiatives in communities across the island of
Ireland.
SSE
Airtricity remains focused on providing a route to market for green
generation and developing low carbon solutions for all customer
segments, with households and businesses across the island of
Ireland benefiting from its home energy efficiency upgrades. The
business sees further opportunity for developing energy efficiency
upgrades in Northern Ireland and developing its B2B proposition
across the island. Part of the low carbon solutions offering comes
via SSE Airtricity's 50% joint venture partnership with Activ8
Solar Energies.
The
business is dedicated to customer proposition innovation with a
particular focus on demand side flexibility, resulting in the
launch of its Energihub offering. Customer service is central to
its innovation efforts, with increased utilisation of digital tools
to meet customers' needs.
SSE
Enterprise
SSE
Enterprise has long been the incubator of new propositions and now,
to build an enhanced platform for growth, structural changes are
being made to incorporate the constituent parts of the business
into other areas of the SSE Group. This strategic realignment will
optimise the growth potential of offerings like smart digital and
distributed energy solutions such as district heat networks, EV
charging infrastructure, private wires, behind the meter solar and
battery, and Independent Distribution Network Operator (IDNO)
capability by leveraging the strength of the Group.
|
Key Performance
Indicators
|
September
24
|
September
23
|
|
SSE
Enterprise adjusted and reported operating (loss) - £m
|
(19.0)
|
(8.4)
|
|
SSE
Heat Network Customer Accounts
|
12,823
|
11,493
|
|
Biomass, heat network and other capacity - MW
|
26
|
26
|
|
Biomass, heat network and other output - GWh
|
43
|
49
|
For financial performance
commentary please refer to the Group Financial
Review.
Operational
delivery
In
July 2024, SSE Enterprise's EV business agreed a joint venture with
TotalEnergies, creating Source . Source
targets the deployment of up to 3,000 high power charge points,
grouped in 300 "EV hubs". The joint venture has made a strong start
to its growth plans with 34 EV charging hubs to be completed by the
financial year end. This includes the launch of Scotland's most
powerful EV charging hub in Myrekirk, Dundee (2.5MVA) and SSE's
first EV hub in the Republic of Ireland in Lough Sheever (0.8
MVA).
In
IDNO, the business has developed a 150MVA private network
connection trial at Imperial Park in South Wales, bringing the
site's total capacity to around 400MVA. Meanwhile, the smart
digital energy solutions business continues to work with SSE Energy
Markets to optimise front-of-meter battery trading for the
Group.
Operational availability across the portfolio of 18 heat
networks in Scotland and England remains strong, with Slough Heat
and Power benefiting from additional connections to deliver
electric, water and steam services across Slough Trading
Estate.
The
business continues to develop its whole system approach to local
networks and has entered a joint development agreement with
Northumberland Estates Renewables to develop large-scale solar
farms, battery energy storage systems and district heat networks in
the north of England.
The
business is pioneering innovation in heat distribution and has an
ambitious project pipeline under development in advance of the UK
Government's proposals for a new regulation and zoning regime to
support investment in heat networks in England. This includes
capturing heat from data centres, deep geothermal, electricity
network transformers and energy-from-waste plants.
SSE Energy
Markets
SSE
Energy Markets - previously Energy Portfolio Management (EPM) -
commercially optimises all of SSE's market-based Business Unit
assets in the wholesale energy markets, securing value on behalf of
these businesses by trading in wholesale energy markets and
managing volatility through active risk management.
This
involves trading the principal commodities to which SSE's asset
portfolios are exposed, as well as the spreads between two or more
commodity prices (e.g. spark spreads): power (baseload and other
products); gas; and carbon (emissions allowances). Each commodity
has different risk and liquidity characteristics, which impacts the
quantum of hedging possible.
|
Key Performance
Indicators
|
September
24
|
September
23
|
|
SSE
Energy Markets adjusted operating profit - £m
|
14.1
|
9.0
|
|
SSE
Energy Markets reported operating profit - £m
|
79.3
|
88.9
|
For financial performance
commentary please refer to the Group Financial
Review.
Operational
delivery
SSE
Energy Markets plays a pivotal role in navigating energy market
volatility, managing risk and ensuring the Group's market-based
Business Units can capture and maximise value. This covers all
trading periods, with decisions being made from one Centre of
Excellence. The value Energy Markets secures for SSE's asset
portfolio continues to be reported against individual Business
Units.
The
business has continued to build a strong portfolio of third-party
assets as part of its strategy of independently adding value to the
Group. In the first half of the year, it signed a 15-year
route-to-market PPA with Inch Cape to optimise its Inch Cape
Offshore Wind Farm. As part of the agreement, SSE Energy Markets
will offtake 50% of the wind farm's electricity output and
associated environmental benefits.
It
also signed a two-year route-to-market PPA with CWP Energy for its
Aikengall I onshore wind farm in East Lothian, Scotland. This
builds on 10-year optimisation contracts previously secured on
Copenhagen Infrastructure Partners' 500MW BESS project in Coalburn,
Scotland and with Sheaf Energy Limited for their 249MW BESS project
in Kent, England.
SSE
Energy Markets has also increased the volumes it is trading in
European power and gas markets, which will be critical as the Group
seeks opportunities in carefully selected international markets. It
has also continued to adapt to the shifting energy landscape by
further strengthening its data and advanced analytics
capabilities.
ALTERNATIVE PERFORMANCE MEASURES
When
assessing, discussing and measuring the Group's financial
performance, management refer to measures used for internal
performance management. These measures are not defined or specified
under International Financial Reporting Standards ("IFRS") and as
such are considered to be Alternative Performance Measures
("APMs").
By
their nature, APMs are not uniformly applied by all preparers
including other participants in the Group's industry. Accordingly,
APMs used by the Group may not be comparable to other companies
within the Group's industry.
Purpose
APMs
are used by management to aid comparison and assess historical
performance against internal performance benchmarks and across
reporting periods. These measures provide an ongoing and consistent
basis to assess performance by excluding items that are materially
non-recurring, uncontrollable or exceptional. These measures can be
classified in terms of their key financial
characteristics:
· Profit
measures allow management to assess
and benchmark underlying business performance during the period.
They are primarily used by operational management to measure
operating profit contribution and are also used by the Board to
assess performance against business plan. The Group has six profit
measures, of which adjusted operating profit and adjusted profit
before tax are the main focus of management through the financial
period and adjusted earnings per share is the main focus of
management on an annual basis. In order to derive adjusted earnings
per share, the Group has defined adjusted operating profit,
adjusted net finance costs, and adjusted current tax charge as
components of the adjusted earnings per share calculation. Adjusted
EBITDA is used by management as a proxy for cash derived from
ordinary operations of the Group.
· Capital
measures allow management to track
and assess the progress of the Group's significant ongoing
investment in capital assets and projects against their investment
cases, including the expected timing of their operational
deployment and also to provide a measure of progress against the
Group's strategic Net Zero Acceleration Programme Plus objectives
("NZAP Plus").
· Debt measures
allow management to record and monitor both
operating cash generation and the Group's ongoing financing and
liquidity position.
There
have been no changes to the way the Group calculates its APMs in
the current period.
The
following section explains the key APMs applied by the Group and
referred to in these statements:
Profit
measures
|
Group APM
|
Purpose
|
Closest equivalent IFRS
measure
|
Adjustments to reconcile to
primary financial statements
|
|
Adjusted EBITDA (earnings
before interest, tax, depreciation and
amortisation)
|
Profit
measure
|
Operating
profit
|
· Movement on operating and joint venture operating derivatives
('certain re-measurements')
· Exceptional items
· Adjustments to retained Gas Production decommissioning
provision
· Share of joint ventures and associates' interest and
tax
· Depreciation and amortisation before exceptional charges
(including depreciation and amortisation expense on fair value
uplifts)
· Share of joint venture and associates' depreciation and
amortisation
· Non-controlling share of operating profit
· Non-controlling share of depreciation and
amortisation
· Release of deferred income
|
|
Adjusted Operating
Profit
|
Profit
measure
|
Operating
profit
|
· Movement on operating and joint venture operating derivatives
('certain re-measurements')
· Exceptional items
· Adjustments to retained Gas Production decommissioning
provision
· Depreciation and amortisation expense on fair value
uplifts
· Share of joint ventures and associates' interest and
tax
· Non-controlling share of operating profit
|
|
Adjusted Profit Before
Tax
|
Profit
measure
|
Profit before
tax
|
· Movement on operating and financing derivatives ('certain
re-measurements')
· Exceptional items
· Adjustments to retained Gas Production decommissioning
provision
· Non-controlling share of profit before tax
· Depreciation and amortisation expense on fair value
uplifts
· Interest on net pension assets/liabilities (IAS
19)
· Share of joint ventures and associates' tax
|
|
Adjusted Net Finance
Costs
|
Profit
measure
|
Net finance
costs
|
· Exceptional items
· Movement on financing derivatives
· Share of joint ventures and associates' interest
· Non-controlling share of financing costs
· Interest on net pension assets/liabilities (IAS
19)
|
|
Adjusted Current Tax
Charge
|
Profit
measure
|
Tax charge
|
· Share of joint ventures and associates' tax
· Non-controlling share of current tax
· Deferred tax including share of joint ventures, associates
and non-controlling interests
· Tax
on exceptional items and certain re-measurements
|
|
Adjusted Earnings Per
Share
|
Profit
measure
|
Earnings per
share
|
· Exceptional items
· Adjustments to retained Gas Production decommissioning
provision
· Movements on operating and financing derivatives ('certain
re-measurements')
· Depreciation and amortisation expense on fair value
uplifts
· Interest on net pension assets/liabilities (IAS
19)
· Deferred tax including share of joint ventures, associates
and non-controlling interests
|
Rationale for adjustments to
profit measures
1 Movement on operating and
financing derivatives ('certain re-measurements')
This
adjustment can be designated between operating and financing
derivatives.
Operating derivatives are contracts where the Group's SSE
Energy Markets function enters into forward commitments or options
to buy or sell electricity, gas and other commodities to meet the
future demand requirements of the Group's SSE Business Energy and
SSE Airtricity operating units, or to optimise the value of the
production from SSE Renewables and Thermal generation assets or to
conduct other trading subject to the value at risk limits set out
by the Energy Markets Risk Committee. Certain of these contracts
(predominately purchase contracts) are determined to be derivative
financial instruments under IFRS 9 and as such are required to be
recorded at their fair value. Changes in the fair value of those
commodity contracts designated as IFRS 9 financial instruments are
reflected in the income statement (as part of 'certain
re-measurements'). The Group shows the change in the fair value of
these forward contracts separately as this mark-to-market movement
is not relevant to the underlying performance of its operating
segments due to the volatility that can arise on revaluation. The
Group will recognise the underlying value of these contracts as the
relevant commodity is delivered, which will predominantly be within
the subsequent 12 to 24 months. Conversely, commodity contracts
that are not financial instruments under IFRS 9 (predominately
sales contracts) are accounted for as 'own use' contracts and are
consequently not recorded until the commodity is delivered and the
contract is settled. Gas inventory purchased by the Group's Gas
Storage business for secondary trading opportunities is also held
at fair value with gains and losses on re-measurement recognised as
part of 'certain re-measurements' in the income statement. Finally,
the mark-to-market valuation movements on the Group's contracts for
difference contracts entered into by SSE Renewables that are not
designated as government grants and which are measured as Level 3
fair value financial instruments are also included within 'certain
re-measurements'.
Financing derivatives include all fair value and cash flow
interest rate hedges, non-hedge accounted (mark-to-market) interest
rate derivatives, cash flow foreign exchange hedges and non-hedge
accounted foreign exchange contracts entered into by the Group to
manage its banking and liquidity requirements as well as risk
management relating to interest rate and foreign exchange
exposures. Changes in the fair value of those financing derivatives
are reflected in the income statement (as part of 'certain
re-measurements'). The Group shows the change in the fair value of
these forward contracts separately as this mark-to-market movement
is not relevant to the underlying performance of its operating
segments.
The
re-measurements arising from operating and financing derivatives,
and the tax effects thereof, are disclosed separately to aid
understanding of the underlying performance of the
Group.
2 Exceptional
Items
Exceptional charges or credits, and the tax effects thereof,
are considered unusual by nature or scale and of such significance
that separate disclosure is required for the underlying performance
of the Group to be properly understood. Further explanation for the
classification of an item as exceptional is included in note 2
(iii).
3 Adjustments to retained
Gas Production decommissioning provision
The
Group retains an obligation for 60% of the decommissioning
liabilities of its former Gas Production business which was
disposed in October 2021. The revaluation adjustments relating to
these decommissioning liabilities are accounted for through the
Group's consolidated income statement and are removed from the
Group's adjusted profit measures as the revaluation of the
provision is not considered to be part of the Group's core
continuing operations.
4 Share of joint ventures
and associates' interest and tax
This
adjustment can be split between the Group's share of interest and
the Group's share of tax arising from its investments in equity
accounted joint ventures and associates. The Group is required to
report profit before interest and tax ('operating profit')
including its share of the profit after tax of its equity accounted
joint ventures and associates. However, for internal performance
management purposes and for consistency of treatment, SSE reports
its adjusted operating profit measure before its share of the
interest and/or tax on joint ventures and associates.
5 Share of joint ventures
and associates' depreciation and amortisation
For
management purposes, the Group considers EBITDA (earnings before
interest, tax, depreciation and amortisation) based on a
sum-of-the-parts derived metric which includes a share of the
EBITDA from equity accounted investments. While this is not equal
to adjusted cash generated from operating activities, it is
considered useful by management in assessing a proxy for such a
measure, given the complexity of the Group structure and the range
of investment structures utilised.
For
the purpose of calculating the 'Net Debt to EBITDA' metric,
'adjusted EBITDA' is further refined to remove the proportion of
adjusted EBITDA from equity-accounted joint ventures relating to
off-balance sheet debt. This metric is not calculated for 30
September period ends.
6 Depreciation and
amortisation expense on fair value uplifts
The
Group's strategy includes the realisation of value (developer
gains) from divestments of stakes in SSE Renewables' offshore and
international developments. In addition, for strategic purposes,
the Group may also decide to bring in equity partners to other
businesses and assets. Where SSE's interest in such vehicles
changes from full to joint control, and the subsequent arrangement
is classified as an equity accounted joint venture, SSE may
recognise a fair value uplift on the remeasurement of its retained
equity investment. Those non-cash accounting uplifts will be
treated as exceptional gains in the period of the relevant
transactions completing. Furthermore, SSE may acquire businesses or
joint venture interests which are determined to generate an
exceptional opening gain on acquisition and accordingly an
exceptional accounting fair value uplift to the opening assets
acquired will be recorded. These uplifts create assets or
adjustments to assets, which are depreciated or amortised over the
remaining life of the underlying assets or contracts in those
businesses with the charge being included in the Group's
depreciation and amortisation expense. The Group's adjusted
operating profit, adjusted profit before tax and adjusted earnings
per share are therefore adjusted to exclude any additional
depreciation, amortisation and impairment expense arising from fair
value uplifts given these charges derived from significant one-off
gains which are treated as exceptional when initially
recognised.
7 Release of deferred
income
The
Group deducts the release of deferred income in the period from its
adjusted EBITDA metric as it principally relates to customer
contributions against depreciating assets. As the metric adds back
depreciation, the income release is also deducted.
8 Interest on net pension
assets/liabilities (IAS 19 "Employee Benefits")
The
Group's net interest income relating to defined benefit pension
schemes is derived from the net assets of the schemes as valued
under IAS 19. This will mean that the credit or charge recognised
in any given period will be dependent on the impact of actuarial
assumptions such as inflation and discount rates. The Group
excludes these from its adjusted profit measures due to the
non-cash nature of these charges or credits.
9 Deferred
tax
The
Group adjusts for deferred tax when arriving at adjusted profit
after tax, adjusted earnings per share and its adjusted effective
rate of tax. Deferred tax arises as a result of differences in
accounting and tax bases that give rise to potential future
accounting credits or charges. As the Group remains committed to
its ongoing capital programme, the liabilities associated are not
expected to reverse and accordingly the Group excludes these from
its adjusted profit measures.
10 Results attributable to
non-controlling interest holders
The
Group's structure includes non-wholly owned but controlled
subsidiaries which are consolidated within the financial statements
of the Group. The most significant of those is SSEN Transmission, a
25% stake in which was divested on 30 November 2022. In the current
period ended 30 September 2024 and in the year ended 31 March 2024
the Group has removed the share of profit attributable to holders
of non-controlling equity stakes in all such businesses from the
point when the ownership structure changed from all of its profit
measures, to report all metrics based on the residual share of
profit items attributable to the ordinary equity holders of the
Group. The adjustment has been applied consistently to all of the
Group's adjusted profit measures, including removing proportionate
non-controlling share of operating profit and depreciation and
amortisation from the Group's adjusted EBITDA metric; removing the
non-controlling share of operating profit from the Group's adjusted
operating profit metric; removing the non-controlling share of net
finance costs from the Group's adjusted net finance costs metric;
and removing the non-controlling interest share of current tax from
the Group's adjusted current tax metric.
30 September
2024
|
Continuing operations (£m)
|
Reported
|
Movement on derivatives
|
Exceptional items
|
Adjustments to Gas Production decommissioning
provision
|
Depreciation expense on FV uplifts
|
Joint
venture interest and tax
|
Interest on net pension asset
|
Deferred tax
|
Share
of profits attributable to non-controlling interests
|
Adjusted
|
|
Operating profit
|
902.8
|
(86.5)
|
21.9
|
(10.8)
|
9.9
|
75.3
|
-
|
-
|
(52.4)
|
860.2
|
|
Net
finance (costs)/income
|
(56.9)
|
4.6
|
(0.3)
|
-
|
-
|
(86.2)
|
(10.2)
|
-
|
3.3
|
(145.7)
|
|
Profit before taxation
|
845.9
|
(81.9)
|
21.6
|
(10.8)
|
9.9
|
(10.9)
|
(10.2)
|
-
|
(49.1)
|
714.5
|
|
Taxation
|
(213.3)
|
19.7
|
(3.1)
|
-
|
-
|
10.9
|
-
|
95.3
|
(5.5)
|
(96.0)
|
|
Profit after taxation
|
632.6
|
(62.2)
|
18.5
|
(10.8)
|
9.9
|
-
|
(10.2)
|
95.3
|
(54.6)
|
618.5
|
|
Attributable to other equity holders
|
(110.5)
|
-
|
-
|
-
|
-
|
-
|
-
|
(17.8)
|
54.6
|
(73.7)
|
|
Profit attributable to ordinary shareholders
|
522.1
|
(62.2)
|
18.5
|
(10.8)
|
9.9
|
-
|
(10.2)
|
77.5
|
-
|
544.8
|
|
Number of shares for EPS
|
1,094.2
|
|
|
|
|
|
|
|
|
1,094.2
|
|
Earnings per share (pence)
|
47.7
|
|
|
|
|
|
|
|
|
49.8
|
Adjusted
EBITDA
30 September
2024
|
Adjusted operating profit from continuing
operations
£m
|
Share
of joint venture and associates' depreciation and
amortisation
£m
|
Release of deferred income
£m
|
Depreciation expense on FV uplifts
£m
|
Depreciation, impairment and amortisation before exceptional
charges
£m
|
Share
of depreciation, impairment and amortisation before exceptional
items attributable to non-controlling interests
£m
|
Adjusted EBITDA
£m
|
|
860.2
|
110.2
|
(7.4)
|
(9.9)
|
387.9
|
(18.0)
|
1,323.0
|
30 September 2023
(restated*)
|
Continuing operations (£m)
|
Reported
|
Movement on derivatives
|
Exceptional items
|
Adjustments to Gas Production decommissioning
provision
|
Depreciation expense on FV uplifts
|
Joint
venture interest and tax
|
Interest on net pension asset
|
Deferred tax
|
Share
of profits attributable to non-controlling interests
|
Adjusted
|
|
Operating profit
|
644.3
|
(49.7)
|
113.7
|
(3.5)
|
9.4
|
50.2
|
-
|
-
|
(71.2)
|
693.2
|
|
Net
finance (costs)/income
|
(29.0)
|
(41.0)
|
(0.2)
|
-
|
-
|
(47.8)
|
(12.8)
|
-
|
2.8
|
(128.0)
|
|
Profit before taxation
|
615.3
|
(90.7)
|
113.5
|
(3.5)
|
9.4
|
2.4
|
(12.8)
|
-
|
(68.4)
|
565.2
|
|
Taxation
|
(155.9)
|
21.3
|
(3.2)
|
-
|
-
|
(2.4)
|
-
|
47.4
|
4.4
|
(88.4)
|
|
Profit after taxation
|
459.4
|
(69.4)
|
110.3
|
(3.5)
|
9.4
|
-
|
(12.8)
|
47.4
|
(64.0)
|
476.8
|
|
Attributable to other equity holders
|
(124.3)
|
-
|
-
|
-
|
-
|
-
|
-
|
(12.8)
|
64.0
|
(73.1)
|
|
Profit attributable to ordinary shareholders
|
335.1
|
(69.4)
|
110.3
|
(3.5)
|
9.4
|
-
|
(12.8)
|
34.6
|
-
|
403.7
|
|
Number of shares for EPS
|
1,090.4
|
|
|
|
|
|
|
|
|
1,090.4
|
|
Earnings per share (pence)
|
30.7
|
|
|
|
|
|
|
|
|
37.0
|
*The
comparative has been restated. See note 2(v).
Adjusted
EBITDA
30 September
2023
|
Adjusted operating profit from continuing
operations
£m
|
Share
of joint venture and associates' depreciation and
amortisation
£m
|
Release of deferred income
£m
|
Depreciation expense on FV uplifts
£m
|
Depreciation, impairment and amortisation before exceptional
charges
£m
|
Share
of depreciation, impairment and amortisation before exceptional
items attributable to non-controlling interests
£m
|
Adjusted EBITDA
£m
|
|
693.2
|
104.3
|
(6.4)
|
(9.4)
|
343.6
|
(15.7)
|
1,109.6
|
31 March
2024
|
Continuing operations (£m)
|
Reported
|
Movement on derivatives
|
Exceptional items
|
Adjustments to Gas Production decommissioning
provision
|
Depreciation expense on FV uplifts
|
Joint
venture interest and tax
|
Interest on net pension asset
|
Deferred tax
|
Share
of profits attributable to non-controlling interests
|
Adjusted
|
|
Operating profit
|
2,608.2
|
(522.7)
|
266.3
|
9.9
|
19.0
|
184.8
|
-
|
-
|
(139.1)
|
2,426.4
|
|
Net
finance costs
|
(113.1)
|
(6.1)
|
(0.3)
|
-
|
-
|
(110.7)
|
(26.2)
|
-
|
4.7
|
(251.7)
|
|
Profit before taxation
|
2,495.1
|
(528.8)
|
266.0
|
9.9
|
19.0
|
74.1
|
(26.2)
|
-
|
(134.4)
|
2,174.7
|
|
Taxation
|
(610.7)
|
130.3
|
(23.3)
|
-
|
-
|
(74.1)
|
-
|
198.8
|
8.0
|
(371.0)
|
|
Profit after taxation
|
1,884.4
|
(398.5)
|
242.7
|
9.9
|
19.0
|
-
|
(26.2)
|
198.8
|
(126.4)
|
1,803.7
|
|
Attributable to other equity holders
|
(173.9)
|
-
|
-
|
-
|
-
|
-
|
-
|
(25.6)
|
126.4
|
(73.1)
|
|
Profit attributable to ordinary shareholders
|
1,710.5
|
(398.5)
|
242.7
|
9.9
|
19.0
|
-
|
(26.2)
|
173.2
|
-
|
1,730.6
|
|
Number of shares for EPS
|
1,091.8
|
|
|
|
|
|
|
|
|
1,091.8
|
|
Earnings per share (pence)
|
156.7
|
|
|
|
|
|
|
|
|
158.5
|
Adjusted
EBITDA
31 March
2024
|
Adjusted operating profit from continuing
operations
£m
|
Share
of joint venture and associates' depreciation and
amortisation
£m
|
Release of deferred income
£m
|
Depreciation expense on FV uplifts
£m
|
Depreciation, impairment and amortisation before exceptional
charges
£m
|
Share
of depreciation, impairment and amortisation before exceptional
items attributable to non-controlling interests
£m
|
Adjusted EBITDA
£m
|
|
2,426.4
|
208.8
|
(13.0)
|
(19.0)
|
724.9
|
(32.5)
|
3,295.6
|
debt
measure
|
Group APM
|
Purpose
|
Closest equivalent IFRS
measure
|
Adjustments to reconcile to
primary financial statements
|
|
Adjusted Net Debt and Hybrid
Capital
|
Debt
measure
|
Unadjusted net
debt
|
· Hybrid equity
· Cash
held and posted as collateral
· Lease obligations
· Non-controlling share of borrowings and cash
|
rationale for Adjustments to
debt measure
11 Hybrid
equity
The
characteristics of certain hybrid capital securities mean they
qualify for recognition as equity rather than debt under applicable
accounting standards. Consequently, their coupon payments are
presented within equity rather than within finance costs. As a
result, the coupon payments are not included in SSE's adjusted
profit before tax measure. In order to present total funding
provided from sources other than ordinary shareholders, SSE
presents its adjusted net debt measure inclusive of hybrid capital
to better reflect the Group's funding position.
12 Cash held and posted as
collateral
Cash
held and posted as collateral refers to cash balances received from
and deposited with counterparties including trading exchanges.
Collateral balances mostly represent initial and variation margin,
required as part of the management of the Group's exposures on
commodity contracts, that will be received on maturity of the
related trades. Loans with a maturity of less than three months are
also included in this adjustment. The Group includes this
adjustment in order to better reflect the immediate cash resources
to which it has access, which in turn better reflects the Group's
funding position.
13 Lease
obligations
SSE's
reported loans and borrowings include lease liabilities on
contracts within the scope of IFRS 16 "Leases", which are not
directly related to the external financing of the Group. The Group
excludes these liabilities from its adjusted net debt and hybrid
capital measure to better reflect the Group's underlying funding
position with its primary sources of capital.
14 Debt and cash
attributable to non-controlling interest holders
The
Group's structure includes non-wholly owned but controlled
subsidiaries which are consolidated within the financial statements
of the Group under IFRS. The most significant of those is SSEN
Transmission, a 25% stake in which was divested on 30 November
2022. Following completion of the transaction, the Group has
removed the share of external debt and cash in these subsidiaries
proportionately attributable to the non-controlling interest
holders from its adjusted net debt and hybrid capital metric. While
legal entitlement to these items has not changed, the Group makes
this adjustment to present net debt attributable to ordinary equity
holders of the Group.
|
March
2024
|
|
|
September
2024
|
September 2023
|
|
£m
|
|
|
£m
|
£m
|
|
(8,097.8)
|
Unadjusted net debt
|
|
(8,688.8)
|
(8,050.6)
|
|
(353.2)
|
Cash
(held)/posted as collateral
|
|
(260.2)
|
140.6
|
|
407.5
|
Lease
obligations
|
|
401.4
|
394.4
|
|
490.2
|
External net debt attributable to non-controlling
interests
|
|
586.2
|
454.2
|
|
(7,553.3)
|
Adjusted Net
Debt
|
|
(7,961.4)
|
(7,061.4)
|
|
(1,882.4)
|
Hybrid equity
|
|
(1,882.4)
|
(1,882.4)
|
|
(9,435.7)
|
Adjusted Net Debt and Hybrid
Capital
|
|
(9,843.8)
|
(8,943.8)
|
capital
measures
|
Group APM
|
Purpose
|
Closest equivalent IFRS
measure
|
Adjustments to reconcile to
primary financial statements
|
|
Adjusted Investment and
Capital Expenditure
|
Capex
measure
|
Capital additions to
intangible assets and property, plant and
equipment
|
· Customer funded additions
· Allowances and certificates
· Additions acquired through business combinations
· Joint ventures and associates' additions funding
· Non-controlling share of capital expenditure
· Lease asset additions
|
|
Adjusted Investment, Capital
and Acquisition Expenditure
|
Capital
measure
|
Capital additions to
intangible assets and property, plant and
equipment
|
· Customer funded additions
· Allowances and certificates
· Additions acquired through business combinations
· Joint ventures and associates' additions funding
· Non-controlling share of capital expenditure
· Lease asset additions
· Acquisition cash consideration
|
rationalE for Adjustments to
capex measures
15 Customer funded
additions
Customer funded additions represent additions to electricity
and other networks funded by customer contributions. Given these
are directly funded by customers, these additions have been
excluded to better reflect the Group's underlying investment
position.
16 Allowances and
certificates
Allowances and certificates consist of purchased carbon
emissions allowances and generated or purchased renewable
obligations certificates ("ROCs") and additions in the period are
not included in the Group's 'capital expenditure and investment'
APM to better reflect the Group's investment in enduring
operational assets.
17 Additions acquired
through business combinations
Where
the Group acquires an early stage development company, which is
classified as the acquisition of an asset, or group of assets and
not the acquisition of a business, the acquisition is treated as an
addition to intangible assets or property, plant and equipment and
is included within 'adjusted investment and capital expenditure'.
Where the Group acquires an established business or interest in an
equity-accounted joint venture requiring a fair value assessment in
line with the principles of IFRS 3 'Business Combinations', the
fair value of acquired consolidated tangible or intangible assets
are excluded from the Group's 'adjusted investment and capital
expenditure', as they are not direct capital expenditure by the
Group. However, the fair valuation of consideration paid for the
business or investment is included in the Group's 'adjusted
investment, capital and acquisition expenditure' metric, see 21
below. During the period there were no significant business
acquisitions.
18 Joint ventures and
associates' additions funding
Joint
ventures and associates' additions included in the Group's capital
measures represent the direct loan or equity funding provided by
the Group to joint venture and associate arrangements in relation
to capital expenditure projects. This has been included to better
reflect the Group's use of directly funded equity accounted
vehicles to grow the Group's asset base. Asset additions funded by
project finance raised within the Group's joint ventures and
associates are not included in this adjustment.
19 Non-controlling interest
share of capital expenditure
The
Group's structure includes non-wholly owned but controlled
subsidiaries which are consolidated within the financial statements
of the Group under IFRS. The most significant of those is SSEN
Transmission, a 25% stake in which was divested on 30 November
2022. In the current period and prior year, the Group has removed
the share of capital additions attributable proportionately to
these equity holders from the point when the ownership structure
changed from its "adjusted investment and capital expenditure" and
"adjusted investment, capital and acquisition expenditure" metrics.
This is consistent with the adjustments noted elsewhere related to
these non-controlling interests.
20 Lease
additions
Additions of right of use assets under the Group's IFRS 16
compliant policies for lease contracts are excluded from the
Group's adjusted capital measures as they do not represent directly
funded capital investment. This is consistent with the treatment of
lease obligations explained at 13, above.
21 Acquisition cash
consideration in relation to business
combinations
The
Group has outlined a significant investment programme which will
partly be achieved through the acquisition of businesses with
development opportunities for the Group. The cash consideration
paid for these entities is included within the Group's adjusted
investment, capital and acquisition expenditure metric as it
provides stakeholders an accurate basis of cash investment into the
Group's total development pipeline and is consistent with the
reporting of the Group's Net Zero Acceleration Programme Plus.
During the period there were no significant business
acquisitions.
|
March
2024
|
|
|
September 2024
|
September 2023
|
|
£m
|
|
|
£m
|
£m
|
|
1,314.2
|
Capital additions to intangible assets
|
|
392.5
|
381.0
|
|
1,971.4
|
Capital additions to property, plant and equipment
|
|
1,180.8
|
939.4
|
|
3,285.6
|
Capital additions to
intangible assets and property, plant and
equipment
|
|
1,573.3
|
1,320.4
|
|
(152.0)
|
Customer funded additions
|
|
(92.6)
|
(91.4)
|
|
(774.5)
|
Allowances and certificates
|
|
(192.4)
|
(163.3)
|
|
390.0
|
Joint
ventures and associates' additions
|
|
173.6
|
94.3
|
|
(199.4)
|
Non-controlled interests share of capital
expenditure
|
|
(126.8)
|
(80.8)
|
|
(73.0)
|
Lease
asset additions
|
|
(43.0)
|
(24.9)
|
|
2,476.7
|
Adjusted Investment and
Capital Expenditure
|
|
1,292.1
|
1,054.3
|
|
2,476.7
|
Adjusted Investment, Capital
and Acquisition Expenditure
|
|
1,292.1
|
1,054.3
|
INTERIM FINANCIAL STATEMENTS
Consolidated Income
Statement
for the period 1 April 2024
to 30 September 2024
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before exceptional items and
certain re-measure-ments
|
Exceptional items and
certain re-measure-ments (note 6)
|
Total
|
|
Before exceptional items and certain
re-measure-ments
|
Exceptional items and certain re-measure-ments (note 6)
(restated*)
|
Total
(restated*)
|
|
|
Note
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
Revenue
|
5
|
4,459.3
|
-
|
4,459.3
|
|
4,790.5
|
-
|
4,790.5
|
|
Cost
of sales
|
|
(2,778.4)
|
118.7
|
(2,659.7)
|
|
(3,295.3)
|
60.3
|
(3,235.0)
|
|
Gross
profit
|
|
1,680.9
|
118.7
|
1,799.6
|
|
1,495.2
|
60.3
|
1,555.5
|
|
Operating costs
|
|
(836.4)
|
(21.9)
|
(858.3)
|
|
(734.2)
|
(113.7)
|
(847.9)
|
|
Debt
impairment charges
|
|
(21.2)
|
-
|
(21.2)
|
|
(64.7)
|
-
|
(64.7)
|
|
Other
operating income
|
|
7.7
|
-
|
7.7
|
|
16.3
|
-
|
16.3
|
|
Operating profit/(loss)
before joint ventures and associates
|
|
831.0
|
96.8
|
927.8
|
|
712.6
|
(53.4)
|
659.2
|
|
Joint ventures and
associates:
|
|
|
|
|
|
|
|
|
|
Share
of operating profit
|
|
82.5
|
-
|
82.5
|
|
45.9
|
-
|
45.9
|
|
Share
of interest
|
|
(86.2)
|
-
|
(86.2)
|
|
(47.8)
|
-
|
(47.8)
|
|
Share
of movement in derivatives
|
|
-
|
(32.2)
|
(32.2)
|
|
-
|
(10.6)
|
(10.6)
|
|
Share
of tax
|
|
2.9
|
8.0
|
10.9
|
|
(5.0)
|
2.6
|
(2.4)
|
|
Share of loss on joint
ventures and associates
|
|
(0.8)
|
(24.2)
|
(25.0)
|
|
(6.9)
|
(8.0)
|
(14.9)
|
|
Operating
profit/(loss)
|
5
|
830.2
|
72.6
|
902.8
|
|
705.7
|
(61.4)
|
644.3
|
|
Finance income
|
7
|
97.5
|
0.3
|
97.8
|
|
103.6
|
41.2
|
144.8
|
|
Finance costs
|
7
|
(150.1)
|
(4.6)
|
(154.7)
|
|
(173.8)
|
-
|
(173.8)
|
|
Profit/(loss) before
taxation
|
|
777.6
|
68.3
|
845.9
|
|
635.5
|
(20.2)
|
615.3
|
|
Taxation
|
8
|
(188.7)
|
(24.6)
|
(213.3)
|
|
(135.2)
|
(20.7)
|
(155.9)
|
|
Profit/(loss) for the
period
|
|
588.9
|
43.7
|
632.6
|
|
500.3
|
(40.9)
|
459.4
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
Ordinary shareholders of the parent
|
|
478.4
|
43.7
|
522.1
|
|
376.0
|
(40.9)
|
335.1
|
|
Non-controlling interests
|
|
36.8
|
-
|
36.8
|
|
51.2
|
-
|
51.2
|
|
Other
equity holders
|
|
73.7
|
-
|
73.7
|
|
73.1
|
-
|
73.1
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
Basic
(pence)
|
10
|
|
|
47.7
|
|
|
|
30.7
|
|
Diluted (pence)
|
10
|
|
|
47.6
|
|
|
|
30.7
|
The
accompanying notes are an integral part of this interim
statement.
*The
comparative Consolidated Income Statement has been restated. See
note 2(v).
Consolidated Income
Statement
for the year ended 31 March
2024
|
|
|
|
Before exceptional items and certain
re-measure-ments
|
Exceptional items and certain re-measure-ments
(note 6)
|
Total
|
|
|
Note
|
|
£m
|
£m
|
£m
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
|
|
|
|
|
Revenue
|
5
|
|
10,457.2
|
-
|
10,457.2
|
|
Cost
of sales
|
|
|
(6,568.3)
|
461.3
|
(6,107.0)
|
|
Gross
profit
|
|
|
3,888.9
|
461.3
|
4,350.2
|
|
Operating costs
|
|
|
(1,577.7)
|
(270.9)
|
(1,848.6)
|
|
Debt
impairment charges
|
|
|
(128.8)
|
-
|
(128.8)
|
|
Other
operating income
|
|
|
116.7
|
4.6
|
121.3
|
|
Operating profit before
joint ventures and associates
|
|
|
2,299.1
|
195.0
|
2,494.1
|
|
Joint ventures and
associates:
|
|
|
|
|
|
|
Share
of operating profit
|
|
|
237.5
|
-
|
237.5
|
|
Share
of interest
|
|
|
(110.7)
|
-
|
(110.7)
|
|
Share
of movement in derivatives
|
|
|
-
|
61.4
|
61.4
|
|
Share
of tax
|
|
|
(58.8)
|
(15.3)
|
(74.1)
|
|
Share of profit on joint
ventures and associates
|
|
|
68.0
|
46.1
|
114.1
|
|
Operating
profit
|
5
|
|
2,367.1
|
241.1
|
2,608.2
|
|
Finance income
|
7
|
|
198.8
|
6.4
|
205.2
|
|
Finance costs
|
7
|
|
(318.3)
|
-
|
(318.3)
|
|
Profit before
taxation
|
|
|
2,247.6
|
247.5
|
2,495.1
|
|
Taxation
|
8
|
|
(519.0)
|
(91.7)
|
(610.7)
|
|
Profit for the
year
|
|
|
1,728.6
|
155.8
|
1,884.4
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
Ordinary shareholders of the parent
|
|
|
1,554.7
|
155.8
|
1,710.5
|
|
Non-controlling interests
|
|
|
100.8
|
-
|
100.8
|
|
Other
equity holders
|
|
|
73.1
|
-
|
73.1
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
Basic
(pence)
|
10
|
|
|
|
156.7
|
|
Diluted (pence)
|
10
|
|
|
|
156.5
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of this interim
statement.
Consolidated Statement of
Comprehensive Income
for the period 1 April 2024
to 30 September 2024
|
Year
ended 31 March 2024
|
|
Six months ended 30
September 2024
|
Six
months ended 30 September 2023 (restated*)
|
|
£m
|
|
£m
|
£m
|
|
1,884.4
|
Profit for the period -
continuing operations
|
632.6
|
459.4
|
|
|
Other
comprehensive income:
|
|
|
|
|
Items that will be
reclassified subsequently to profit or loss:
|
|
|
|
6.5
|
Net
gains/(losses) on cash flow hedges
|
(8.3)
|
41.3
|
|
2.1
|
Transferred to assets and liabilities on cash flow
hedges
|
0.3
|
1.9
|
|
(0.3)
|
Taxation on cash flow hedges
|
2.4
|
(10.2)
|
|
8.3
|
|
(5.6)
|
33.0
|
|
(40.9)
|
Share
of other comprehensive (loss)/income of joint ventures and
associates, net of taxation
|
(27.4)
|
84.4
|
|
(66.6)
|
Exchange difference on translation of foreign
operations
|
(56.1)
|
(27.1)
|
|
30.9
|
Gain
on net investment hedge
|
46.1
|
7.4
|
|
(68.3)
|
|
(43.0)
|
97.7
|
|
|
Items that will not be
reclassified to profit or loss:
|
|
|
|
(116.4)
|
Actuarial (loss)/gain on retirement benefit schemes, net of
taxation
|
25.1
|
(112.3)
|
|
3.5
|
Gains
on revaluation of investments in equity instruments, net of
taxation
|
-
|
-
|
|
(112.9)
|
|
25.1
|
(112.3)
|
|
|
|
|
|
|
(181.2)
|
Other comprehensive loss,
net of taxation
|
(17.9)
|
(14.6)
|
|
|
|
|
|
|
1,703.2
|
Total comprehensive income
for the period - continuing
operations
|
614.7
|
444.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
1,529.3
|
Ordinary shareholders of the parent
|
509.6
|
317.4
|
|
100.8
|
Non-controlling interest
|
31.4
|
54.3
|
|
73.1
|
Other
equity holders
|
73.7
|
73.1
|
|
1,703.2
|
|
614.7
|
444.8
|
The
accompanying notes are an integral part of this interim
statement.
*The
comparative Consolidated Statement of Other Comprehensive Income
has been restated. See note 2(v).
Consolidated Balance
Sheet
as at 30 September
2024
|
At
31 March
2024
|
|
|
At 30 September
2024
|
At
30
September 2023
(restated*)
|
|
£m
|
|
Note
|
£m
|
£m
|
|
|
Assets
|
|
|
|
|
16,611.5
|
Property, plant and equipment
|
|
17,461.1
|
15,986.8
|
|
2,324.6
|
Goodwill and other intangible assets
|
|
2,362.1
|
2,122.1
|
|
1,963.2
|
Equity investments in joint ventures and
associates
|
|
1,889.8
|
1,982.4
|
|
1,352.9
|
Loans
to joint ventures and associates
|
|
1,484.4
|
1,196.8
|
|
3.2
|
Other
investments
|
|
7.6
|
2.9
|
|
170.1
|
Other
receivables
|
|
181.6
|
159.5
|
|
64.2
|
Derivative financial assets
|
16
|
63.2
|
139.9
|
|
421.6
|
Retirement benefit assets
|
17
|
470.8
|
411.0
|
|
22,911.3
|
Non-current
assets
|
|
23,920.6
|
22,001.4
|
|
|
|
|
|
|
|
754.7
|
Intangible assets
|
|
305.5
|
263.9
|
|
343.0
|
Inventories
|
|
331.3
|
246.0
|
|
2,654.1
|
Trade
and other receivables
|
|
2,634.6
|
2,343.5
|
|
35.1
|
Current tax asset
|
|
58.4
|
59.2
|
|
1,035.9
|
Cash
and cash equivalents
|
|
890.8
|
902.4
|
|
536.1
|
Derivative financial assets
|
16
|
420.8
|
262.6
|
|
-
|
Assets held for sale
|
|
19.3
|
-
|
|
5,358.9
|
Current
assets
|
|
4,660.7
|
4,077.6
|
|
28,270.2
|
Total
assets
|
|
28,581.3
|
26,079.0
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
1,128.0
|
Loans
and other borrowings
|
13
|
1,903.9
|
1,394.9
|
|
3,322.5
|
Trade
and other payables
|
|
2,831.0
|
2,545.5
|
|
9.3
|
Current tax liabilities
|
|
4.0
|
-
|
|
3.1
|
Financial guarantee liabilities
|
|
2.9
|
47.0
|
|
52.7
|
Provisions
|
|
63.8
|
21.8
|
|
345.2
|
Derivative financial liabilities
|
16
|
250.9
|
505.2
|
|
-
|
Liabilities held for sale
|
|
19.3
|
-
|
|
4,860.8
|
Current
liabilities
|
|
5,075.8
|
4,514.4
|
|
|
|
|
|
|
|
8,005.7
|
Loans
and other borrowings
|
13
|
7,675.7
|
7,558.1
|
|
1,536.8
|
Deferred tax liabilities
|
|
1,639.7
|
1,352.9
|
|
1,092.8
|
Trade
and other payables
|
|
1,184.8
|
1,037.4
|
|
36.4
|
Financial guarantee liabilities
|
|
35.0
|
34.5
|
|
712.4
|
Provisions
|
|
690.9
|
701.9
|
|
222.2
|
Derivative financial liabilities
|
16
|
208.8
|
141.7
|
|
11,606.3
|
Non-current
liabilities
|
|
11,434.9
|
10,826.5
|
|
16,467.1
|
Total
liabilities
|
|
16,510.7
|
15,340.9
|
|
11,803.1
|
Net assets
|
|
12,070.6
|
10,738.1
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
548.1
|
Share
capital
|
15
|
554.2
|
547.9
|
|
820.1
|
Share
premium
|
|
814.0
|
820.3
|
|
52.6
|
Capital redemption reserve
|
|
52.6
|
52.6
|
|
407.6
|
Hedge
reserve
|
|
377.7
|
556.0
|
|
(2.6)
|
Translation reserve
|
|
(10.3)
|
11.9
|
|
7,345.0
|
Retained earnings
|
|
7,618.7
|
6,163.6
|
|
9,170.8
|
Equity attributable to
ordinary shareholders of the parent
|
|
9,406.9
|
8,152.3
|
|
1,882.4
|
Hybrid equity
|
14
|
1,882.4
|
1,882.4
|
|
749.9
|
Attributable to non-controlling interests
|
|
781.3
|
703.4
|
|
11,803.1
|
Total
equity
|
|
12,070.6
|
10,738.1
|
*The
comparative Consolidated Balance Sheet has been restated. See note
2(v).
The
accompanying notes are an integral part of this interim
statement.
Consolidated Statement of
Changes in EQuity
for the period 1 April 2024
to 30 September 2024
|
|
Share
capital
|
Share
premium
|
Capital redemption
reserve
|
Hedge
reserve
|
Translation
reserve
|
Retained
earnings
|
Total attributable to
ordinary shareholders
|
Hybrid
equity
|
Total equity before
non-controlling interest
|
Non-controlling
interest
|
Total
equity
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
At 1
April 2024
|
548.1
|
820.1
|
52.6
|
407.6
|
(2.6)
|
7,345.0
|
9,170.8
|
1,882.4
|
11,053.2
|
749.9
|
11,803.1
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
522.1
|
522.1
|
73.7
|
595.8
|
36.8
|
632.6
|
|
Other
comprehensive income/(loss)
|
-
|
-
|
-
|
(29.9)
|
(7.7)
|
25.1
|
(12.5)
|
-
|
(12.5)
|
(5.4)
|
(17.9)
|
|
Total
comprehensive income for the period
|
-
|
-
|
-
|
(29.9)
|
(7.7)
|
547.2
|
509.6
|
73.7
|
583.3
|
31.4
|
614.7
|
|
Dividends to shareholders
|
-
|
-
|
-
|
-
|
-
|
(437.3)
|
(437.3)
|
-
|
(437.3)
|
-
|
(437.3)
|
|
Scrip
dividend related share issue
|
6.1
|
(6.1)
|
-
|
-
|
-
|
225.5
|
225.5
|
-
|
225.5
|
-
|
225.5
|
|
Issue
of treasury shares
|
-
|
-
|
-
|
-
|
-
|
0.7
|
0.7
|
-
|
0.7
|
-
|
0.7
|
|
Distributions to Hybrid equity holders
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(73.7)
|
(73.7)
|
-
|
(73.7)
|
|
Share
buyback
|
-
|
-
|
-
|
-
|
-
|
(75.0)
|
(75.0)
|
-
|
(75.0)
|
-
|
(75.0)
|
|
Credit in respect of employee share awards
|
-
|
-
|
-
|
-
|
-
|
14.8
|
14.8
|
-
|
14.8
|
-
|
14.8
|
|
Investment in own shares
|
-
|
-
|
-
|
-
|
-
|
(2.2)
|
(2.2)
|
-
|
(2.2)
|
-
|
(2.2)
|
|
At 30
September 2024
|
554.2
|
814.0
|
52.6
|
377.7
|
(10.3)
|
7,618.7
|
9,406.9
|
1,882.4
|
11,289.3
|
781.3
|
12,070.6
|
On 29
August 2024, SSE entered into an irrevocable share buyback
programme up to a maximum of £75.0m. The buyback scheme was
initiated in order to honour SSE's existing commitment to cap scrip
dividend take-up at 25%. As the irrevocable agreement was entered
into prior to the balance sheet date, the full value of the
programme has been recognised as a liability at 30 September 2024.
The share repurchase scheme commenced on 30 September 2024, with
227k of shares repurchased in the period for a total consideration
of £4.3m (including stamp duty and commission). SSE completed the
share buyback process on 16 October 2024.
|
|
Share
capital
|
Share
premium
|
Capital redemption
reserve
|
Hedge
reserve
|
Translation
reserve
|
Retained
earnings
|
Total attributable to
ordinary shareholders
|
Hybrid
equity
|
Total equity before
non-controlling interest
|
Non-controlling
interest
|
Total
equity
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
At 1
April 2023
|
547.0
|
821.2
|
52.6
|
441.2
|
32.1
|
6,657.6
|
8,551.7
|
1,882.4
|
10,434.1
|
649.1
|
11,083.2
|
|
Profit for the period (restated*)
|
-
|
-
|
-
|
-
|
-
|
335.1
|
335.1
|
73.1
|
408.2
|
51.2
|
459.4
|
|
Other
comprehensive income/(loss)
|
-
|
-
|
-
|
114.8
|
(20.2)
|
(112.3)
|
(17.7)
|
-
|
(17.7)
|
3.1
|
(14.6)
|
|
Total
comprehensive income for the period (restated*)
|
-
|
-
|
-
|
114.8
|
(20.2)
|
222.8
|
317.4
|
73.1
|
390.5
|
54.3
|
444.8
|
|
Dividends to shareholders
|
-
|
-
|
-
|
-
|
-
|
(738.1)
|
(738.1)
|
-
|
(738.1)
|
-
|
(738.1)
|
|
Scrip
dividend related share issue
|
0.9
|
(0.9)
|
-
|
-
|
-
|
29.8
|
29.8
|
-
|
29.8
|
-
|
29.8
|
|
Issue
of treasury shares
|
-
|
-
|
-
|
-
|
-
|
0.4
|
0.4
|
-
|
0.4
|
-
|
0.4
|
|
Distributions to Hybrid equity holders
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(73.1)
|
(73.1)
|
-
|
(73.1)
|
|
Credit in respect of employee share awards
|
-
|
-
|
-
|
-
|
-
|
10.8
|
10.8
|
-
|
10.8
|
-
|
10.8
|
|
Investment in own shares
|
-
|
-
|
-
|
-
|
-
|
(19.7)
|
(19.7)
|
-
|
(19.7)
|
-
|
(19.7)
|
|
At 30
September 2023 (restated*)
|
547.9
|
820.3
|
52.6
|
556.0
|
11.9
|
6,163.6
|
8,152.3
|
1,882.4
|
10,034.7
|
703.4
|
10,738.1
|
*The
comparative Consolidated Statement of Changes in Equity has been
restated. See note 2(v).
Consolidated Statement of
Changes in Equity
for the year ended 31 March
2024
|
|
Share
capital
|
Share
premium
|
Capital redemption
reserve
|
Hedge
reserve
|
Translation
reserve
|
Retained
earnings
|
Total attributable to
ordinary shareholders
|
Hybrid
equity
|
Total equity before
non-controlling interest
|
Non-controlling
interest
|
Total
equity
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
At 1
April 2023
|
547.0
|
821.2
|
52.6
|
441.2
|
32.1
|
6,657.6
|
8,551.7
|
1,882.4
|
10,434.1
|
649.1
|
11,083.2
|
|
Profit for the year
|
-
|
-
|
-
|
-
|
-
|
1,710.5
|
1,710.5
|
73.1
|
1,783.6
|
100.8
|
1,884.4
|
|
Other
comprehensive loss
|
-
|
-
|
-
|
(33.6)
|
(34.7)
|
(112.9)
|
(181.2)
|
-
|
(181.2)
|
-
|
(181.2)
|
|
Total
comprehensive income for the year
|
-
|
-
|
-
|
(33.6)
|
(34.7)
|
1,597.6
|
1,529.3
|
73.1
|
1,602.4
|
100.8
|
1,703.2
|
|
Dividends to shareholders
|
-
|
-
|
-
|
-
|
-
|
(956.4)
|
(956.4)
|
-
|
(956.4)
|
-
|
(956.4)
|
|
Scrip
dividend related share issue
|
1.1
|
(1.1)
|
-
|
-
|
-
|
38.6
|
38.6
|
-
|
38.6
|
-
|
38.6
|
|
Issue
of treasury shares
|
-
|
-
|
-
|
-
|
-
|
9.2
|
9.2
|
-
|
9.2
|
-
|
9.2
|
|
Distributions to Hybrid equity holders
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(73.1)
|
(73.1)
|
-
|
(73.1)
|
|
Credit in respect of employee share awards
|
-
|
-
|
-
|
-
|
-
|
20.2
|
20.2
|
-
|
20.2
|
-
|
20.2
|
|
Investment in own shares
|
-
|
-
|
-
|
-
|
-
|
(21.8)
|
(21.8)
|
-
|
(21.8)
|
-
|
(21.8)
|
|
At 31
March 2024
|
548.1
|
820.1
|
52.6
|
407.6
|
(2.6)
|
7,345.0
|
9,170.8
|
1,882.4
|
11,053.2
|
749.9
|
11,803.1
|
Consolidated Cash Flow
Statement
for the period 1 April 2024
to 30 September 2024
|
Year
ended
31 March 2024
|
|
Note
|
Six months ended 30
September 2024
|
Six
months ended 30 September 2023
(restated*)
|
|
£m
|
|
|
£m
|
£m
|
|
2,608.2
|
Operating profit -
continuing operations
|
5
|
902.8
|
644.3
|
|
(114.1)
|
Less/add share of (profit)/loss of joint ventures and
associates
|
|
25.0
|
14.9
|
|
2,494.1
|
Operating profit before
jointly controlled entities and associates
|
|
927.8
|
659.2
|
|
(9.5)
|
Pension service charges, less contributions paid
|
|
(5.5)
|
(6.9)
|
|
(443.4)
|
Movement on operating derivatives
|
|
(115.1)
|
(51.2)
|
|
859.0
|
Depreciation, amortisation, write downs and
impairments
|
|
387.9
|
343.6
|
|
136.8
|
Impairment of joint venture investment including shareholder
loans
|
|
-
|
63.2
|
|
20.2
|
Charge in respect of employee share awards (before
tax)
|
|
14.8
|
10.8
|
|
(9.0)
|
Profit on disposal of assets and businesses
|
|
-
|
-
|
|
14.6
|
Charge/(release) of provisions
|
|
(11.2)
|
(8.5)
|
|
(12.5)
|
Credit in respect of financial guarantees
|
|
(0.9)
|
-
|
|
(13.0)
|
Release of deferred income
|
5
|
(7.4)
|
(6.4)
|
|
3,037.3
|
Cash generated from
operations before working capital movements
|
|
1,190.4
|
1,003.8
|
|
39.6
|
Decrease in inventories
|
|
11.3
|
141.2
|
|
763.1
|
Decrease in receivables
|
|
162.2
|
932.9
|
|
243.0
|
Increase/(decrease) in payables
|
|
(191.7)
|
36.6
|
|
(33.9)
|
Decrease in provisions
|
|
(9.5)
|
(16.8)
|
|
4,049.1
|
Cash generated from
operations
|
|
1,162.7
|
2,097.7
|
|
223.7
|
Dividends received from investments
|
|
98.3
|
112.2
|
|
(67.0)
|
Interest paid
|
|
(43.0)
|
(54.6)
|
|
(345.8)
|
Taxes
paid
|
|
(143.0)
|
(126.3)
|
|
3,860.0
|
Net cash from operating
activities
|
|
1,075.0
|
2,029.0
|
|
|
|
|
|
|
|
(1,970.3)
|
Purchase of property, plant and equipment
|
5
|
(1,137.1)
|
(848.0)
|
|
(542.2)
|
Purchase of other intangible assets
|
5
|
(200.1)
|
(228.6)
|
|
93.4
|
Receipt of government grant income
|
|
13.7
|
-
|
|
17.4
|
Deferred income received
|
|
12.8
|
18.8
|
|
14.9
|
Proceeds from disposals
|
11
|
16.5
|
-
|
|
(42.9)
|
Purchase of businesses, joint ventures and
subsidiaries
|
|
-
|
-
|
|
(443.6)
|
Loans
and equity provided to joint ventures and associates
|
|
(215.2)
|
(133.1)
|
|
14.6
|
Loans
and equity repaid by joint ventures
|
|
18.1
|
6.7
|
|
0.4
|
Decrease in other investments
|
|
-
|
-
|
|
(2,858.3)
|
Net cash from investing
activities
|
|
(1,491.3)
|
(1,184.2)
|
|
|
|
|
|
|
|
9.2
|
Proceeds from issue of share capital
|
15
|
0.7
|
0.4
|
|
(917.8)
|
Dividends paid to the company's equity holders
|
9
|
(211.8)
|
(708.3)
|
|
(73.1)
|
Hybrid equity dividend payments
|
14
|
(73.7)
|
(73.1)
|
|
(21.8)
|
Employee share awards share purchase
|
15
|
(2.2)
|
(19.7)
|
|
1,982.2
|
New
borrowings
|
|
1,655.6
|
1,751.0
|
|
(1,842.7)
|
Repayment of borrowings
|
|
(1,097.7)
|
(1,786.4)
|
|
6.4
|
Settlement of cashflow hedges
|
|
0.3
|
1.9
|
|
(857.6)
|
Net cash (used in)/from
financing activities
|
|
271.2
|
(834.2)
|
|
|
|
|
|
|
|
144.1
|
Net increase/(decrease) in
cash and cash equivalents
|
|
(145.1)
|
10.6
|
|
|
|
|
|
|
|
891.8
|
Cash
and cash equivalents at the start of period
|
|
1,035.9
|
891.8
|
|
144.1
|
Net
increase/(decrease) in cash and cash equivalents
|
|
(145.1)
|
10.6
|
|
1,035.9
|
Cash and cash equivalents at
the end of period
|
|
890.8
|
902.4
|
*The
comparative Consolidated Cashflow Statement has been restated. See
note 2(v).
Notes to the Interim
Financial Statements
1. Condensed Interim Financial
Statements
SSE
plc (the Company) is a company domiciled in Scotland. The condensed
Interim Financial Statements comprise those of the Company and its
subsidiaries (together referred to as the Group).
The
financial information set out in these condensed Interim Financial
Statements does not constitute the Group's statutory accounts for
the periods ended 30 September 2024, 31 March 2024 or 30 September
2023 within the meaning of Section 435 of the Companies Act 2006.
Statutory accounts for the year ended 31 March 2024, which were
prepared in accordance with UK-adopted international accounting
standards, have been reported on by the Group's auditors and
delivered to the Registrar of Companies. The report of the auditor
was (i) unqualified (ii) did not include reference to any matters
to which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain statements under
section 498 (2) or (3) of the Companies Act 2006. The Group's
financial statements for the year ending 31 March 2025 will be
prepared on a consistent basis in accordance with UK-adopted
international accounting standards.
The
financial information set out in these condensed Interim Financial
Statements has been prepared in accordance with the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority
and UK adopted IAS 34 'Interim
Financial Reporting'. The interim financial information is
unaudited but has been formally reviewed by the auditor and its
report to the Company is set out on page 93.
These
interim statements were authorised by the Board on 12 November
2024.
2. Basis of
preparation
These
condensed Interim Financial Statements for the period to 30
September 2024 and the comparative information for the period to 30
September 2023 have been prepared applying the accounting policies
used in the Group's consolidated financial statements for the year
ended 31 March 2024.
(i) Adjusted
measures
The
Directors assess the performance of the Group and its reportable
segments based on 'adjusted measures'. These measures are used for
internal performance management and are believed to be appropriate
for explaining underlying financial performance to users of the
accounts. These measures are also deemed to be the most useful for
the ordinary shareholders of the Company and for other
stakeholders.
Reconciliations from the reported measures to adjusted
measures along with further description of the rationale for those
adjustments are included in the 'Alternative Performance Measures'
section on pages 41 to 47.
(ii)
Going concern
The
Directors consider that the Group has adequate resources to
continue in operational existence for the period to 31 December
2025. The condensed Interim Financial Statements are therefore
prepared on a going concern basis.
In
reaching their conclusion, the Directors regularly review the
Group's funding structure (see note 13) against the current
economic climate to ensure that the Group has the short and long
term funding required. The Group has performed detailed going
concern testing, including the consideration of cash flow forecasts
under stressed scenarios for the period to December
2025.
The
Group has an established €1.5bn Euro commercial paper programme
(paper can be issued in a range of currencies and swapped into
Sterling) and as at 30 September 2024 there was £799m commercial
paper outstanding (31 March 2024: £840m). In the six months ended
30 September 2024, the Group has issued new debt instruments
totalling £0.9bn, and has redeemed £0.2bn of maturing long term
debt, while rolling £0.8bn of short term commercial
paper.
The
Group also continues to have access to its revolving credit
facilities. As at 30 September 2024 there were five committed
facilities totalling £3.5bn which were undrawn, as described in
note 13. On 23 October 2024 these facilities have been re-financed
with the £0.75m facility relating to Scottish Hydro Electric
Transmission plc being increased to £1.5bn, and the £2.75bn of
facilities relating to SSE plc and Distribution being reduced to
£1.5bn. This reduction relates to the cancellation of the £1.0bn
collateral facility due to mature in February 2025, and the £0.25bn
Distribution facility that is no longer required.
This
results in the Group having the following committed
facilities:
· a
£1.5bn revolving credit facility for SSE plc maturing October 2029
with two 1 year extension options; and
· a
£1.5bn revolving credit facility for Scottish Hydro Electric
Transmission plc maturing October 2029 with two 1 year extension
options.
The
re-financing of the committed facilities was undertaken to ensure
the Group is set up to meet its funding obligations over the next
five years, with available committed facilities on the entities
that require them. The opportunity was also taken to increase the
number of relationship banks from 11 to 15, which supports the
Group's growth plans and funding requirements over the next five
years. The £1.5bn revolving credit facility for SSE plc is in place
to provide back-up to the commercial paper programme and support
the Group's capital expenditure plans. The Scottish Hydro Electric
Transmission plc facility, was entered into to help cover the
capital expenditure and working capital of that
business.
(iii)
Exceptional items and certain re-measurements
Exceptional items are those charges or credits that are
considered unusual by nature and/or scale and of such significance
that separate disclosure is required for the financial statements
to be properly understood. The trigger points for recognition of
items as exceptional items will tend to be non-recurring although
exceptional charges (or credits) may impact the same asset class or
segment over time.
Examples of items that may be considered exceptional include
material asset or business impairment charges; reversals of
historic impairments; certain business restructuring and
reorganisation costs; significant realised gains or losses on
disposal; unrealised fair value adjustments on acquisitions or
disposals; and provisions in relation to significant disputes and
claims.
(iii)
Exceptional items and certain re-measurements
(continued)
The
Group operates a policy framework for establishing whether items
should be considered to be exceptional. This framework, which is
reviewed annually, is based on the materiality of the item, by
reference to the Group's key performance measure of adjusted
earnings per share. This framework estimates that any qualifying
item greater than £40.0m will be considered exceptional, with a
potentially lower threshold applied to strategic restructuring of
activities or discontinued operations, which will respectively be
considered on a case by case basis or will always be treated as
exceptional. The only exception to this threshold is for gains or
losses on disposal, or divestment of early stage international or
offshore windfarm development projects within SSE Renewables, which
are considered non-exceptional in line with the Group's strategy to
generate recurring gains from developer divestments. Where a gain
arises on a non-cash transaction, the gain is treated as
exceptional.
Certain re-measurements are re-measurements arising on
certain commodity, interest rate and currency contracts which are
accounted for as held for trading or as fair value hedges in
accordance with the Group's policy for such financial instruments;
re-measurements on stocks of commodities held at the balance sheet
date; or movements in fair valuation of contracts for difference
not designated as government grants. The amount recorded in the
adjusted results for these contracts is the amount settled in the
year as disclosed in note 16.
This
excludes commodity contracts not treated as financial instruments
under IFRS 9 where the contracts are held for the Group's own use
requirements. The fair value of these contracts is not recorded and
the value associated with the contract is not recognised until the
underlying commodity is delivered.
The
impact of changes in Corporation Tax rates on deferred tax balances
are also included within certain re-measurements.
(iv) Other
additional disclosures
As
permitted by IAS 1 'Presentation of financial statements', the
Group's income statement discloses additional information in
respect of joint ventures and associates, exceptional items and
certain re-measurements to aid understanding of the Group's
financial performance and to present results clearly and
consistently.
(v)
Changes to presentation and prior year
adjustments
The
prior period comparatives at 30 September 2023 have been restated
as follows:
Derivative financial
instruments prior period adjustment
A
non-cash adjustment has been made to restate derivative financial
instruments following the identification of an error in the
calculation of the Level 3 non-government Contracts for Difference
("CfD") financial instruments at 30 September 2023. The adjustment
has resulted in a £63.7m credit to certain re-measurements in the
cost of sales line in the income statement (from £3,298.7m to
£3,235.0m), a £56.2m reduction to non-current derivative financial
liabilities (from £197.9m to £141.7m) and a £7.5m increase to
non-current derivative financial assets (from £132.4m to £139.9m)
lines in the balance sheet, with a related current tax impact of
£15.9m (from a charge of £140.0m to £155.9m and from an asset of
£75.1m to £59.2m). As the error primarily relates to the Group's
CfD arrangement with its joint venture investment in Seagreen
Offshore Wind Farm, the share in the joint venture's derivative
re-measurement movements have been debited by £28.9m (increasing
the credit from £18.3m to a £10.6m charge), with a related current
tax charge being credited by £7.2m (from a charge of £9.6m to £2.4m
charge), resulting in a £21.7m decrease in equity investments in
the balance sheet (from £2,004.1m to £1,982.4m). The overall
reported profit after tax increased by £26.1m (from £433.3m to
£459.4m) and the Group's net assets increased by £26.1m (from
£10,715.3m to £10,741.4m). As a result of this adjustment reported
basic and diluted earnings per share for 30 September 2023 have
increased from 28.3p to 30.7p.
This
adjustment was identified and included in the 31 March 2024 results
and has no impact on the adjusted performance measures of the Group
at 30 September 2023.
3. New
accounting policies and reporting changes
The
accounting policies applied in the preparation of these condensed
Interim Financial Statements are consistent with those applied by
the Group in the preparation of the consolidated financial
statements for the year ended 31 March 2024.
Set
out below are revisions to accounting standards that have become
applicable in the period, or which are issued but not yet
effective.
3.1 New
standards, amendments and interpretations effective or adopted by
the Group
In
the 6 months to 30 September 2024, the Group adopted the amendments
to:
- IAS 1 'Presentation of
Financial Statements' in relation to non-current liabilities with
covenants
- IFRS 16 'Leases' in
relation to a lease on sale and leaseback
- IAS 7 'Statement of
Cash Flows' and IFRS 7 'Financial Instruments: Disclosures' in
relation to supplier finance arrangements'
Adoption of these amendments had no material impact on these
condensed Interim Financial Statements.
3.2 New
standards, amendments and interpretations issued, but not yet
adopted by the Group
IFRS
18 'Presentation and Disclosure
in Financial Statements' is expected to be effective from 1
January 2027 (1 April 2027 for the Group) but remains subject to UK
endorsement. The Group is continuing to assess the expected impact
of adoption of the standard.
Amendments to IFRS 9 'Financial Instruments' and IFRS 7
'Financial Instruments:
Disclosures' in relation to the classification and
measurement of financial instruments have been issued and are
expected to be effective from 1 January 2026, but have not been
adopted by the Group as UK endorsement remains outstanding at the
date the financial statements were authorised for issue. The Group
is continuing to assess the expected impact of these
amendments.
4. Accounting judgements and
estimation uncertainty
In
the process of applying the Group's accounting policies, management
is required to make judgements and estimates that will have a
significant effect on the amounts recognised in the financial
statements. Changes in the assumptions underlying the estimates
could result in a significant impact to the financial statements.
The Group's key accounting judgement and estimation areas are noted
below.
4.1 Significant financial
judgements and estimation uncertainties
The
preparation of these condensed Interim Financial Statements has
specifically considered the following significant financial
judgements, some of which are areas of estimation uncertainty as
noted below.
(i) Impairment testing and
valuation of certain non-current assets - financial judgement and
estimation uncertainty
The
Group reviews the carrying amounts of its goodwill, other
intangible assets, specific property, plant and equipment and
investment assets to determine whether any impairments or reversal
of impairments to the carrying value of those assets requires to be
recorded. Where an indicator of impairment or impairment reversal
exists, the recoverable amount of those assets is determined by
reference to value in use calculations or fair value less cost to
sell assessments, if more appropriate.
At 30
September 2024, the Group has reviewed its Thermal generation
assets; Gas Storage assets; Great Britain & Ireland and
Japanese wind assets; and its equity investment in Neos Networks
Limited for indicators of impairment (or impairment reversal)
arising since the last formal review performed at 31 March 2024.
There were no indicators identified and therefore no formal
impairment assessments were performed.
The
Group also performed an assessment of indicators of impairment over
the carrying value of its Southern European goodwill and intangible
development assets and its equity investment in Triton Power
Holdings Limited. The review indicated that there were indicators
of impairment, requiring a full impairment assessment to be
performed at 30 September 2024. The indicators of impairment and
the results of the impairment assessments are documented in note 12
to these Interim Financial Statements.
The
main assumptions in the Group's impairment assessments performed at
31 March 2024 were: regulation and legislation changes (including
the Electricity Generator Levy and climate change related
regulation), power, gas, carbon and other commodity prices,
volatility of gas prices, plant running regimes and load factors
and discount rates.
The
Group will reassess the assets for indicators of impairment, or
impairment reversal, at 31 March 2025.
(ii)
Retirement benefit obligations - estimation
uncertainty
The
assumptions in relation to the cost of providing post-retirement
benefits during the period are based on the Group's best estimates
and are set after consultation with qualified actuaries. While
these assumptions are believed to be appropriate, a change in these
assumptions would impact the level of the retirement benefit
obligation recorded and the cost to the Group of administering the
schemes.
Further detail of the calculation basis, key assumptions used
and the resulting movements in obligations are disclosed in note 17
of these condensed Interim Financial Statements.
(iii)
Revenue recognition - Customers unbilled supply of energy -
estimation uncertainty
Revenue from energy supply activities undertaken by SSE
Business Energy and SSE Airtricity businesses includes an estimate
of the value of electricity or gas supplied to customers between
the date of the last meter reading and the period end. This
estimation comprises both billed revenue and unbilled revenue and
is calculated based on applying the tariffs and contract rates
applicable to customers against aggregated estimated customer
consumption, taking account of various factors including tariffs,
consumption patterns, customer mix, metering data, operational
issues relating to the billing process and externally notified
aggregated volumes supplied to customers from national settlement
bodies. During the year ended 31 March 2024, the Group's SSE
Business Energy Segment completed the implementation of a new
billing system. Due to the timing of the data migration,
which occurred in the second half of the prior financial year for
the majority of customers, the level of unbilled sales and hence
the level of judgement applied in determining the sales accruals
for these customer remains higher than the comparable period to 30
September 2023. At both 30 September 2024 and 31 March 2024 the
Group has recognised a provision against this accrual to reflect
that customer billing delays may result in poorer collection
performance.
This
unbilled estimation is subject to an internal corroboration process
which compares calculated unbilled volumes to a theoretical
'perfect billing' benchmark measure of unbilled volumes (in GWh and
millions of therms) derived from historical consumption patterns
and aggregated metering data used in industry reconciliation
processes. Unbilled revenue is also compared to billings in the
period between the balance sheet date and the finalisation of the
condensed Interim Financial Statements which has provided evidence
of post reporting date billings and hence support to the accrual
recognised.
Given
the requirement of management to apply judgement, the estimated
revenue accrual is considered to be a significant estimate made by
management in preparing the condensed Interim Financial Statements.
A 5% sensitivity on the unbilled energy accrual would equate to an
increase or decrease in the receivable balance of £14.1m (March
2024: £20.7m). A more comprehensive explanation of the Group's
policy, and the nature of the judgements requiring consideration,
is disclosed in note 18 of the Group's 31 March 2024 Annual
Report.
(iv)
Valuation of other receivables - financial judgement and estimation
uncertainty
The
Group holds a £100m loan note due from OVO Holdings Limited
following the disposal of SSE Energy Services on 15 January 2020.
The loan is repayable in full by 31 December 2029, carries interest
at 13.25% and is presented cumulative of accrued interest payments,
discounted at 13.25%. At 30 September 2024, the carrying value (net
of expected credit loss provision of £1.6m (March 2024: £1.6m)) is
£181.6m (March 2024: £170.1m).
The
Group has assessed the recoverability of the loan note receivable
and has recognised a provision for the expected credit loss in
accordance with the requirements of IFRS 9. The Group's assessment
of the recoverability of the loan note is considered to be a
significant financial judgement. The Group has taken appropriate
steps to assess all available information in respect of the
recoverability of the loan note. Procedures included reviewing
recent financial information of Energy Transition Holdings Limited
("ETHL") (new holding company of OVO Group Limited), including the
31 December 2023 statutory financial statements; and discussions
with ETHL management. While the carrying value is considered to be
appropriate, changes in economic conditions could lead to a change
in the expected credit loss incurred by the Group in future
periods.
(v)
Impact of climate change and the transition to net zero - financial
judgement and estimation uncertainty
Climate change and the transition to net zero have been
considered in the preparation of these condensed Interim Financial
Statements. Where relevant, assumptions have been applied that are
consistent to a Paris-aligned 1.5OC 2050 net zero pathway. The
Group has a clearly articulated NZAP Plus plan to lead in the UK's
transition to net zero and aligns its investment plans and business
activities to that strategy. These plans are supported by the
Group's Green Bond framework under which the eighth green bond was
issued by SSEN Transmission in August 2024. The proceeds of the
eighth green bond were allocated to fund Transmission network
projects.
The
impact of future climate change regulation could have a material
impact on the currently reported amounts of the Group's assets and
liabilities. In preparing these condensed Interim Financial
Statements, the following climate change related risks have been
considered:
Valuation of property, plant
and equipment, and impairment assessment of
goodwill
In
the medium term, the transition to net zero may result in
regulation restricting electricity generation from unabated gas
fired power stations. The Group's view is that flexible generation
capacity, such as the Group's fleet of CCGT power stations, will be
an essential part of the net zero transition in order to provide
security of supply to a market increasingly dependent upon
renewable sources, which are inherently intermittent. The majority
of the Group's GB CCGT fleet is nearing the end of its economic
life and it is not currently expected that regulation to require
abatement would be introduced before the planned closure of those
power stations. Of the net book value held at 30 September 2024,
only four assets are forecast to continue to operate beyond 2030
being: Great Island; Keadby 2; Marchwood (which is operated by SSE
under a lease); and Saltend Power Station within the Triton joint
venture. The Group extended the useful economic lives of Peterhead,
Keadby and Medway power stations to March 2030. These changes in
end of life assumptions were reflected in the annual impairment
process at 31 March 2024. The Group's view is that Great Island
will continue to be essential to providing security of supply in
the Irish electricity market. Keadby 2 has an efficiency of around
63% making it the most efficient plant of its type in the UK and
Europe. Work is also underway to explore how to decarbonise Keadby
2 further, with the potential to blend hydrogen into the plant.
Marchwood is a 50% equity accounted joint venture and is considered
one of the most efficient CCGTs in the UK. Saltend was acquired as
part of Triton Power 50% equity accounted joint venture and
supports the long-term decarbonisation of the UK's power system,
and also contributes to security of supply and grid stability.
Initial steps are underway at Saltend, targeting abatement by 2029
through blending up to 30% of low-carbon hydrogen. The Group
considers that other assets operating in the market would be more
likely to close before Keadby 2, Marchwood and Saltend and the
assets will continue to be required to balance the UK electricity
market beyond 2030. As a result, the useful economic lives of the
assets have not been shortened when preparing the condensed Interim
Financial Statements. The Group assesses the useful economic life
of its property, plant and equipment assets
annually.
A
significant increase in renewable generation capacity in the
Group's core markets in the UK and Ireland could potentially result
in an oversupply of renewable electricity at a point in the future,
which would lead to a consequential decrease in the power price
achievable for the Group's wind generation assets. The Group has
not assessed that this constitutes an indicator of impairment at 30
September 2024 as the Group's baseline investment case models
assume a centrally approved volume of new build in these markets
over the life of the existing assets. The Group's policy is to test
the goodwill balances associated with wind generation portfolio for
impairment on an annual basis in line with the requirements of IAS
36.
Changes to weather patterns resulting from global warming
have also been considered as a potential risk to future returns
from the Group's wind and hydro assets. Changes to weather patterns
could result in calmer, drier weather patterns, which would reduce
volumes achievable for the Group's wind and hydro generation assets
(although noting that this would likely lead to capacity
constraints and hence higher prices). This has not been assessed as
an indicator of impairment for operating assets in the UK and
Ireland at 30 September 2024, as there is no currently observable
evidence to support that scenario directly.
Valuations of
decommissioning provisions
The
Group holds decommissioning provisions for its Renewable and
Thermal generation assets and has retained a 60% share for the
decommissioning of its disposed Gas Production business. As noted
above, the Group's view at 30 September 2024 is that climate change
regulation will not bring forward the closure dates of its CCGT
fleet, many of which are expected to close before 2030. Similarly,
it is expected that fundamental changes to weather patterns, or the
impact of new wind generation capacity will not bring forward the
decommissioning of the Group's current wind farm
portfolio.
The
Group's discounted share of the Gas Production provision is £207.0m
(March 2024: £219.7m). At 30 September 2024, the impact of
discounting of this retained provision is £67.9m (March 2024:
£68.3m), which is expected to be incurred across the period to 31
March 2040. If the decommissioning activity was accelerated due to
changes in legislation, the costs of unwinding the discounting of
the provision would be recognised earlier.
Defined benefit scheme
assets
The
Group holds defined benefit pension scheme assets at 30 September
2024 which could be impacted by climate-related risks. The Trustees
of the schemes have a long-term investment strategy that seeks to
reduce investment risk as and when appropriate and takes into
consideration the impact of climate-related risk.
Going
concern
The
implications of near term climate-related risks have been
considered in the Group's going concern assessment.
4.2 Other
accounting judgements and estimation uncertainties - changes from
the prior year
The
Group has made no changes to accounting judgements and estimation
uncertainties and identified no new areas of estimation uncertainty
from those presented in the Group's 2024 Annual Report.
4.3 Other areas
of estimation uncertainty
Decommissioning
costs
The
calculation of the Group's decommissioning provisions involves the
estimation of quantum and timing of cash flows to settle the
obligation. The Group engages independent valuation experts to
estimate the cost of decommissioning its Renewable, Thermal and Gas
Storage assets every three years based on current technology and
prices. The last independent assessment for the majority of the
Group's Renewable and Thermal generation assets was performed in
the year to 31 March 2022. The costs of these provisions will be
reassessed in the second half of the financial year. The last
formal assessment for Gas Storage assets was performed in the year
to 31 March 2023. Retained decommissioning costs in relation to the
disposed Gas Production business are periodically agreed with the
field operators and reflect the latest expected economic production
lives of the fields.
The
dates for settlement of future decommissioning costs are uncertain,
particularly for the disposed Gas Production business where
reassessment of gas and liquids reserves and fluctuations in
commodity prices can lengthen or shorten the field life.
At 30
September 2024, the carrying value of decommissioning provisions
has decreased due to increases in discount rate and minimal
movement in inflation assumptions since 31 March 2024. All
revaluation movements have been matched by an offsetting adjustment
to the associated asset, except for the decrease of £10.8m (March
2024: increase £9.9m) to the provision relating to Gas Production
activities, which has been recognised in the income
statement.
5. Segmental
information
There
have been no changes to the Group's core operating segments during
the period. These segments are used internally by the Board to
manage the business and make strategic decisions. The Group's
'Corporate unallocated' segment is the Group's residual corporate
central costs which are not allocated to individual segments and
includes the contribution from Enerveo Limited and the Group's
joint venture investment in Neos Networks Limited.
The
types of products and services from which each reportable segment
generates its revenue are:
|
Business area
|
Reported segments
|
Description
|
|
Continuing
operations
|
|
Transmission
|
SSEN
Transmission
|
The
economically regulated high voltage transmission of electricity
from generating plant to the distribution network in the North of
Scotland.
|
|
Distribution
|
SSEN
Distribution
|
The
economically regulated lower voltage distribution of electricity to
customer premises in the North of Scotland and the South of
England.
|
|
Renewables
|
SSE
Renewables
|
The
generation of electricity from renewable sources, such as onshore
and offshore windfarms and run of river and pumped storage hydro
assets in the UK and Ireland. This segment also includes the
development of wind assets in Japan and the Netherlands; solar
assets in Poland; and the development of wind, solar and battery
opportunities in the UK and Southern Europe.
|
|
Thermal
|
SSE
Thermal
|
The
generation of electricity from thermal plants including CCGTs and
the Group's interests in multifuel assets in the UK and
Ireland.
|
|
Gas
Storage
|
The
operation of gas storage facilities in Great Britain, utilising
capacity to optimise trading opportunities associated with the
assets.
|
|
Energy Customer Solutions
|
SSE
Business Energy
|
The
supply of electricity and gas to business customers in Great
Britain and smart buildings (BEMS) activity.
|
|
SSE
Airtricity
|
The
supply of electricity, gas and energy related services to
residential and business customers in the Republic of Ireland and
Northern Ireland.
|
|
SSE
Enterprise
|
SSE
Enterprise
|
The
provision of low carbon energy solutions to
customers; behind-the-meter solar and battery
solutions, EV charging activities, private electric networks
and heat and cooling networks.
On 30
September 2024, the Group announced that SSE Enterprise will be
integrated into SSE's other segments to provide an enhanced
platform for growth. This realignment of segment reporting will be
applied in the annual financial statements for the year to 31 March
2025.
|
|
SSE
Energy Markets
|
SSE
Energy Markets
|
The
provision of a route to market for the Group's Renewable and
Thermal generation businesses and commodity procurement for the
Group's energy supply businesses in line with the Group's stated
hedging policies.
|
The
internal measure of profit used by the Board is 'adjusted profit
before interest and tax' or 'adjusted operating profit' which is
arrived at before exceptional items, the impact of financial
instruments measured under IFRS 9, share of profits attributable to
non-controlling interests, the net interest costs/income associated
with defined benefit pension schemes, adjustments to the retained
Gas Production decommissioning, the impact of depreciation on fair
value uplifts and after the removal of taxation and interest on
profits from joint ventures and associates.
Analysis of revenue, operating profit, capital expenditure
and earnings before interest, taxation, depreciation and
amortisation ('EBITDA') by segment is provided below. All revenue
and profit before taxation arise from operations within the UK and
Ireland. Details of revenue recognition policies are included in
the Group's consolidated financial statements for the year to 31
March 2024.
5. Segmental information
(continued)
5.
(a) Revenue by segment
|
|
Six months ended 30
September 2024
|
Six
months ended 30 September 2023
|
|
|
Reported
revenue
|
Inter-segment
revenue
|
Segment
revenue
|
Reported revenue
|
Inter-segment revenue
|
Segment revenue
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
SSEN
Transmission
|
397.2
|
-
|
397.2
|
441.1
|
-
|
441.1
|
|
SSEN
Distribution
|
700.5
|
35.1
|
735.6
|
468.2
|
24.4
|
492.6
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
145.4
|
454.2
|
599.6
|
140.6
|
185.0
|
325.6
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
238.2
|
396.1
|
634.3
|
279.0
|
1,530.7
|
1,809.7
|
|
Gas
Storage
|
8.1
|
1,154.8
|
1,162.9
|
4.6
|
1,302.3
|
1,306.9
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
SSE Business Energy
|
1,278.9
|
20.1
|
1,299.0
|
1,544.5
|
21.0
|
1,565.5
|
|
SSE Airtricity
|
837.9
|
59.1
|
897.0
|
949.6
|
75.1
|
1,024.7
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
40.3
|
16.9
|
57.2
|
38.3
|
10.1
|
48.4
|
|
SSE
Energy Markets:
|
|
|
|
|
|
|
|
Gross trading
|
5,234.6
|
2,479.9
|
7,714.5
|
6,812.4
|
4,010.0
|
10,822.4
|
|
Optimisation trades(i)
|
(4,529.1)
|
(130.6)
|
(4,659.7)
|
(5,916.2)
|
(1,327.2)
|
(7,243.4)
|
|
SSE
Energy Markets
|
705.5
|
2,349.3
|
3,054.8
|
896.2
|
2,682.8
|
3,579.0
|
|
Corporate unallocated
|
107.3
|
149.3
|
256.6
|
28.4
|
119.0
|
147.4
|
|
Total SSE
Group
|
4,459.3
|
4,634.9
|
9,094.2
|
4,790.5
|
5,950.4
|
10,740.9
|
|
|
|
|
|
Year
ended 31 March 2024
|
|
|
|
|
|
Reported revenue
|
Inter-segment revenue
|
Segment revenue
|
|
|
|
|
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
SSEN
Transmission
|
|
|
|
885.2
|
-
|
885.2
|
|
SSEN
Distribution
|
|
|
|
1,004.0
|
45.9
|
1,049.9
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
|
|
|
335.5
|
876.3
|
1,211.8
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
|
|
|
571.0
|
3,123.9
|
3,694.9
|
|
Gas
Storage
|
|
|
|
11.2
|
2,948.4
|
2,959.6
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
SSE Business Energy
|
|
|
|
3,183.2
|
48.5
|
3,231.7
|
|
SSE Airtricity
|
|
|
|
2,021.2
|
170.0
|
2,191.2
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
|
|
|
91.9
|
23.6
|
115.5
|
|
SSE
Energy Markets:
|
|
|
|
|
|
|
|
Gross trading
|
|
|
|
15,074.3
|
7,951.4
|
23,025.7
|
|
Optimisation trades(i)
|
|
|
|
(12,785.1)
|
(2,674.2)
|
(15,459.3)
|
|
SSE
Energy Markets
|
|
|
|
2,289.2
|
5,277.2
|
7,566.4
|
|
Corporate unallocated
|
|
|
|
64.8
|
250.9
|
315.7
|
|
Total SSE
Group
|
|
|
|
10,457.2
|
12,764.7
|
23,221.9
|
|
|
|
|
|
|
|
|
(i) The Group continues to
provide optimisation volume disclosures to disclose the volume of
trading in the period by its SSE Energy Markets segment.
5. Segmental information
(continued)
5. (a)
Revenue by
segment (continued)
Disaggregation of
revenue
Revenue from contracts with customers can be disaggregated by
reported segment, by major service lines and by timing of revenue
recognition as follows:
|
|
Six months ended 30
September 2024
|
|
|
Revenue from contracts with
customers
|
|
|
|
Goods or services
transferred over time
|
Goods or services
transferred at a point in time
|
|
|
|
|
Use of electricity
networks
|
Supply of energy and
ancillary services
|
Construction related
services
|
Other contracted
services
|
Physical
energy
|
Gas
storage
|
Other
revenue
|
Total revenue from contracts
with customers
|
Other contract
revenue
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
SSEN
Transmission
|
385.4
|
-
|
-
|
10.4
|
-
|
-
|
1.4
|
397.2
|
-
|
397.2
|
|
SSEN
Distribution
|
676.5
|
-
|
-
|
7.3
|
-
|
-
|
9.9
|
693.7
|
6.8
|
700.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
-
|
30.9
|
-
|
53.4
|
60.2
|
-
|
0.9
|
145.4
|
-
|
145.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
-
|
235.4
|
-
|
-
|
-
|
-
|
0.6
|
236.0
|
2.2
|
238.2
|
|
Gas
Storage
|
-
|
-
|
-
|
-
|
-
|
8.1
|
-
|
8.1
|
-
|
8.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
|
|
|
SSE Business Energy
|
-
|
1,250.6
|
-
|
-
|
-
|
-
|
28.3
|
1,278.9
|
-
|
1,278.9
|
|
SSE Airtricity
|
-
|
825.8
|
-
|
-
|
-
|
-
|
12.1
|
837.9
|
-
|
837.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
11.4
|
12.4
|
6.5
|
-
|
-
|
-
|
4.5
|
34.8
|
5.5
|
40.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
-
|
-
|
-
|
-
|
548.1
|
-
|
157.4
|
705.5
|
-
|
705.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
-
|
-
|
-
|
95.6
|
-
|
-
|
11.7
|
107.3
|
-
|
107.3
|
|
Total SSE
Group
|
1,073.3
|
2,355.1
|
6.5
|
166.7
|
608.3
|
8.1
|
226.8
|
4,444.8
|
14.5
|
4,459.3
|
5. Segmental information
(continued)
5. (a)
Revenue by
segment (continued)
Disaggregation of revenue
(continued)
|
|
Six
months ended 30 September 2023
|
|
|
Revenue from contracts with customers
|
|
|
|
Goods
or services transferred over time
|
Goods
or services transferred at a point in time
|
|
|
|
|
Use
of electricity networks
|
Supply of energy and ancillary services
|
Construction related services
|
Other
contracted services
|
Physical energy
|
Gas
storage
|
Other
revenue
|
Total
revenue from contracts with customers
|
Other
contract revenue
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
SSEN
Transmission
|
429.8
|
-
|
-
|
9.3
|
-
|
-
|
2.0
|
441.1
|
-
|
441.1
|
|
SSEN
Distribution
|
445.1
|
-
|
-
|
6.5
|
-
|
-
|
7.4
|
459.0
|
9.2
|
468.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
-
|
25.1
|
-
|
49.6
|
63.7
|
-
|
2.2
|
140.6
|
-
|
140.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
-
|
264.5
|
-
|
-
|
-
|
-
|
14.5
|
279.0
|
-
|
279.0
|
|
Gas
Storage
|
-
|
-
|
-
|
-
|
-
|
4.6
|
-
|
4.6
|
-
|
4.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
|
|
|
SSE Business Energy
|
-
|
1,523.5
|
-
|
-
|
-
|
-
|
21.0
|
1,544.5
|
-
|
1,544.5
|
|
SSE Airtricity
|
-
|
937.8
|
-
|
-
|
-
|
-
|
11.8
|
949.6
|
-
|
949.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
8.6
|
14.3
|
6.3
|
1.9
|
-
|
-
|
1.7
|
32.8
|
5.5
|
38.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
-
|
-
|
-
|
-
|
757.1
|
-
|
139.1
|
896.2
|
-
|
896.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
-
|
-
|
-
|
-
|
-
|
-
|
28.4
|
28.4
|
-
|
28.4
|
|
Total SSE
Group
|
883.5
|
2,765.2
|
6.3
|
67.3
|
820.8
|
4.6
|
228.1
|
4,775.8
|
14.7
|
4,790.5
|
|
|
|
|
|
|
|
|
|
|
|
| |
5. Segmental information
(continued)
5. (a)
Revenue by
segment (continued)
Disaggregation of revenue
(continued)
|
|
Year
ended 31 March 2024
|
|
|
Revenue from contracts with customers
|
|
|
|
Goods
or services transferred over time
|
Goods
or services transferred at a point in time
|
|
|
|
|
Use
of electricity networks
|
Supply of energy and ancillary services
|
Construction related services
|
Other
contracted services
|
Physical energy
|
Gas
storage
|
Other
revenue
|
Total
revenue from contracts with customers
|
Other
contract revenue
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
SSEN
Transmission
|
854.1
|
-
|
-
|
18.8
|
-
|
-
|
12.3
|
885.2
|
-
|
885.2
|
|
SSEN
Distribution
|
951.2
|
-
|
-
|
14.0
|
-
|
-
|
16.9
|
982.1
|
21.9
|
1,004.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
-
|
58.6
|
-
|
104.0
|
169.5
|
-
|
3.4
|
335.5
|
-
|
335.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
-
|
531.5
|
-
|
-
|
-
|
-
|
39.5
|
571.0
|
-
|
571.0
|
|
Gas
Storage
|
-
|
-
|
-
|
-
|
-
|
11.2
|
-
|
11.2
|
-
|
11.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
|
|
|
SSE Business Energy
|
-
|
3,135.4
|
-
|
-
|
-
|
-
|
47.8
|
3,183.2
|
-
|
3,183.2
|
|
SSE Airtricity
|
-
|
1,999.2
|
-
|
-
|
-
|
-
|
22.0
|
2,021.2
|
-
|
2,021.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
18.6
|
30.7
|
4.7
|
-
|
-
|
-
|
32.1
|
86.1
|
5.8
|
91.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
-
|
-
|
-
|
-
|
2,136.5
|
-
|
152.7
|
2,289.2
|
-
|
2,289.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
-
|
-
|
-
|
-
|
-
|
-
|
64.8
|
64.8
|
-
|
64.8
|
|
Total SSE
Group
|
1,823.9
|
5,755.4
|
4.7
|
136.8
|
2,306.0
|
11.2
|
391.5
|
10,429.5
|
27.7
|
10,457.2
|
5. Segmental information
(continued)
5. (b) Operating profit/(loss)
by segment
|
|
Six months ended 30
September 2024
|
|
|
Adjusted operating profit
reported to the Board
|
Depreciation expense on fair
value uplifts
|
Joint Venture/ Associate
share of interest and tax
|
Adjustments to Gas
Production decommissioning provision
|
Non-controlling
interests
|
Before exceptional items and
certain re-measurements
|
Exceptional items and
certain re-measurements
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
SSEN
Transmission
|
157.5
|
-
|
-
|
-
|
52.5
|
210.0
|
-
|
210.0
|
|
SSEN
Distribution
|
346.3
|
-
|
-
|
-
|
-
|
346.3
|
-
|
346.3
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
335.6
|
(9.8)
|
(84.3)
|
-
|
(0.1)
|
241.4
|
29.1
|
270.5
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
(9.0)
|
(0.1)
|
2.6
|
-
|
-
|
(6.5)
|
0.2
|
(6.3)
|
|
Gas
Storage
|
(34.8)
|
-
|
-
|
-
|
-
|
(34.8)
|
-
|
(34.8)
|
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
|
SSE Business Energy
|
60.1
|
-
|
-
|
-
|
-
|
60.1
|
-
|
60.1
|
|
SSE Airtricity
|
70.6
|
-
|
-
|
-
|
-
|
70.6
|
-
|
70.6
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
(19.0)
|
-
|
-
|
-
|
-
|
(19.0)
|
-
|
(19.0)
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
14.1
|
-
|
-
|
-
|
-
|
14.1
|
65.2
|
79.3
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
Corporate
unallocated
|
(50.5)
|
-
|
-
|
10.8
|
-
|
(39.7)
|
(21.9)
|
(61.6)
|
|
Neos Networks
|
(10.7)
|
-
|
(1.6)
|
-
|
-
|
(12.3)
|
-
|
(12.3)
|
|
Total SSE
Group
|
860.2
|
(9.9)
|
(83.3)
|
10.8
|
52.4
|
830.2
|
72.6
|
902.8
|
|
|
|
|
|
|
|
|
|
| |
The
adjusted operating profit of the Group is reported after removal of
the Group's share of interest, fair value movements on operating
derivatives, the depreciation expense on fair value uplifts and tax
from joint ventures and associates, Gas Production decommissioning
costs, operating profit from non-controlling interests and after
adjusting for exceptional items and certain re-measurements (note
6).
5. Segmental information
(continued)
5. (b) Operating profit/(loss)
by segment (continued)
|
|
|
|
|
Six
months ended 30 September 2023 (restated*)
|
|
|
Adjusted operating profit reported to the Board
|
Depreciation expense on fair value uplifts
|
Joint
Venture/ Associate share of interest and tax
|
Adjustments to Gas Production decommissioning
provision
|
Non-controlling interests
|
Before exceptional items and certain
re-measurements
|
Exceptional items and certain re-measurements
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
SSEN
Transmission
|
215.6
|
-
|
-
|
-
|
71.7
|
287.3
|
-
|
287.3
|
|
SSEN
Distribution
|
120.1
|
-
|
-
|
-
|
-
|
120.1
|
-
|
120.1
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
86.8
|
(9.4)
|
(49.1)
|
-
|
(0.5)
|
27.8
|
(9.5)
|
18.3
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
312.9
|
-
|
(1.6)
|
-
|
-
|
311.3
|
(76.7)
|
234.6
|
|
Gas
Storage
|
(86.7)
|
-
|
-
|
-
|
-
|
(86.7)
|
(4.6)
|
(91.3)
|
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
|
SSE Business Energy
|
88.0
|
-
|
-
|
-
|
-
|
88.0
|
-
|
88.0
|
|
SSE Airtricity
|
5.8
|
-
|
(0.5)
|
-
|
-
|
5.3
|
-
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
(8.4)
|
-
|
-
|
-
|
-
|
(8.4)
|
-
|
(8.4)
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
9.0
|
-
|
-
|
-
|
-
|
9.0
|
79.9
|
88.9
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
(35.2)
|
-
|
-
|
3.5
|
-
|
(31.7)
|
(50.5)
|
(82.2)
|
|
Neos Networks
|
(14.7)
|
-
|
(1.6)
|
-
|
-
|
(16.3)
|
-
|
(16.3)
|
|
Total SSE
Group
|
693.2
|
(9.4)
|
(52.8)
|
3.5
|
71.2
|
705.7
|
(61.4)
|
644.3
|
|
|
|
|
|
|
|
|
|
|
*The
comparative has been restated within the "Exceptional items and
certain re-measurements" column above for SSE Renewables. See note
2(v).
5. Segmental information
(continued)
5. (b) Operating profit/(loss)
by segment (continued)
|
|
Year
ended 31 March 2024
|
|
|
|
Adjusted operating profit reported to the Board
|
Depreciation expense on fair value uplifts
|
Joint
Venture/ Associate share of interest and tax
|
Adjustments to Gas Production decommissioning
provision
|
Non-controlling interests
|
Before exceptional items and certain
re-measurements
|
Exceptional items and certain re-measurements
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
SSEN
Transmission
|
419.3
|
-
|
-
|
-
|
139.8
|
559.1
|
-
|
559.1
|
|
SSEN
Distribution
|
272.1
|
-
|
-
|
-
|
-
|
272.1
|
-
|
272.1
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
833.1
|
(19.0)
|
(145.7)
|
-
|
(0.7)
|
667.7
|
(37.4)
|
630.3
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
736.1
|
-
|
(13.1)
|
-
|
-
|
723.0
|
(78.6)
|
644.4
|
|
Gas
Storage
|
82.8
|
-
|
-
|
-
|
-
|
82.8
|
(125.0)
|
(42.2)
|
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
|
SSE Business Energy
|
95.8
|
-
|
-
|
-
|
-
|
95.8
|
-
|
95.8
|
|
SSE Airtricity
|
95.0
|
-
|
(0.5)
|
-
|
-
|
94.5
|
-
|
94.5
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
(25.6)
|
-
|
-
|
-
|
-
|
(25.6)
|
-
|
(25.6)
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
38.9
|
-
|
-
|
-
|
-
|
38.9
|
551.1
|
590.0
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
(88.8)
|
-
|
-
|
(9.9)
|
-
|
(98.7)
|
4.6
|
(94.1)
|
|
Neos Networks
|
(32.3)
|
-
|
(10.2)
|
-
|
-
|
(42.5)
|
(73.6)
|
(116.1)
|
|
Total SSE
Group
|
2,426.4
|
(19.0)
|
(169.5)
|
(9.9)
|
139.1
|
2,367.1
|
241.1
|
2,608.2
|
|
|
|
|
|
|
|
|
|
| |
5. Segmental information
(continued)
5. (c) Capital expenditure by
segment
|
|
Capital additions to
intangible assets
30 September
2024
£m
|
Capital additions to
property, plant and equipment
30 September
2024
£m
|
Capital additions to intangible assets
30
September 2023
£m
|
Capital additions to property, plant and equipment
30
September 2023
£m
|
Capital additions to intangible assets
31
March
2024
£m
|
Capital additions to property, plant and equipment
31
March
2024
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
SSEN
Transmission
|
-
|
504.8
|
-
|
324.8
|
12.8
|
784.7
|
|
SSEN
Distribution
|
4.5
|
384.4
|
4.7
|
332.2
|
20.3
|
636.8
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
144.3
|
223.5
|
134.4
|
246.8
|
355.1
|
433.8
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
6.7
|
13.7
|
15.4
|
5.2
|
83.3
|
24.6
|
|
Gas
Storage
|
-
|
0.9
|
-
|
0.2
|
-
|
0.8
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
SSE Business Energy
|
11.3
|
15.2
|
27.8
|
-
|
43.7
|
-
|
|
SSE Airtricity
|
9.5
|
0.2
|
8.6
|
0.4
|
14.1
|
0.7
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
10.2
|
12.4
|
11.1
|
4.7
|
26.4
|
32.4
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
196.9
|
-
|
166.7
|
-
|
723.4
|
-
|
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
9.1
|
25.7
|
12.3
|
25.1
|
35.1
|
57.6
|
|
Total SSE
Group
|
392.5
|
1,180.8
|
381.0
|
939.4
|
1,314.2
|
1,971.4
|
|
Increase in prepayments related to capital
expenditure
|
-
|
142.7
|
-
|
76.7
|
-
|
215.1
|
|
Tarbert temporary generation additions
|
-
|
13.7
|
-
|
-
|
-
|
93.4
|
|
Decrease/(increase) in trade payables related to capital
expenditure
|
-
|
(64.5)
|
10.9
|
(51.8)
|
2.5
|
(84.6)
|
|
Customer funded additions
|
-
|
(92.6)
|
-
|
(91.4)
|
-
|
(152.0)
|
|
Lease
asset additions
|
-
|
(43.0)
|
-
|
(24.9)
|
-
|
(73.0)
|
|
Less
non-cash items:
|
|
|
|
|
|
|
|
Allowances and certificates
|
(153.2)
|
-
|
(68.1)
|
-
|
(346.6)
|
-
|
|
Net cash
outflow
|
239.3
|
1,137.1
|
323.8
|
848.0
|
970.1
|
1,970.3
|
Capital additions do not include assets acquired in
acquisitions, assets acquired under leases or assets constructed
that the Group were reimbursed by way of a government grant. During
the period the Group received reimbursements totalling £13.7m
(2023: £nil; March 2024: £93.4m) from government bodies relating to
construction of a temporary generation plant at the Group's Tarbert
site, which have been presented separately on the cashflow
statement. Capital additions to intangible assets includes the cash
purchase of emissions allowances and certificates of £39.2m (2023:
£95.2m; March 2024: £427.9m). These purchases are presented in the
cash flow statement within operating activities since they relate
to the obligation to surrender the allowances and certificates in
line with operating volumes of emissions. Other non-cash additions
comprise self-generated renewable obligation
certificates.
No
segmental analysis of assets is required to be disclosed as this
information is not presented to the Board.
5. Segmental information
(continued)
5. (c) Capital expenditure by
segment (continued)
|
|
|
|
|
|
|
Six months ended 30
September 2024
|
|
|
Capital additions to
intangible assets
£m
|
Capital additions to
property, plant and equipment
£m
|
Capital Investment relating
to Joint Ventures and Associates (i)
£m
|
Allowances and
certificates
(ii)
£m
|
Customer funded
additions
(iii)
£m
|
Lease asset additions
(iv)
£m
|
Share of non-controlling
interests
(v)
£m
|
Adjusted
Investment and Capital
Expenditure
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
SSEN
Transmission
|
-
|
504.8
|
-
|
-
|
-
|
(2.6)
|
(125.6)
|
376.6
|
|
SSEN
Distribution
|
4.5
|
384.4
|
-
|
-
|
(92.6)
|
(0.1)
|
-
|
296.2
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
144.3
|
223.5
|
142.5
|
-
|
-
|
(17.2)
|
(1.2)
|
491.9
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
6.7
|
13.7
|
26.0
|
-
|
-
|
-
|
-
|
46.4
|
|
Gas
Storage
|
-
|
0.9
|
-
|
-
|
-
|
-
|
-
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
|
SSE
Business
Energy
|
11.3
|
15.2
|
-
|
-
|
-
|
-
|
-
|
26.5
|
|
SSE Airtricity
|
9.5
|
0.2
|
-
|
-
|
-
|
-
|
-
|
9.7
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
10.2
|
12.4
|
5.1
|
-
|
-
|
(0.7)
|
-
|
27.0
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
196.9
|
-
|
-
|
(192.4)
|
-
|
-
|
-
|
4.5
|
|
|
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
9.1
|
25.7
|
-
|
-
|
-
|
(22.4)
|
-
|
12.4
|
|
Total SSE
Group
|
392.5
|
1,180.8
|
173.6
|
(192.4)
|
(92.6)
|
(43.0)
|
(126.8)
|
1,292.1
|
|
|
|
|
|
|
|
|
|
| |
i)
Represents equity or debt funding provided to joint ventures or
associates in relation to capital expenditure projects.
ii)
Allowances and Certificates consist of purchased carbon emissions
allowances and generated or purchased renewable obligations
certificates (ROCs) and are not included in the Group's Capital
Expenditure and Investment alternative performance
measure.
iii)
Represents removal of additions to electricity and other networks
funded by customer contributions.
iv)
Represents removal of additions in respect of right of use assets
recognised on the commencement date of a lease
arrangement.
v)
Represents the share of capital additions attributable to
non-controlling interests.
5. Segmental information
(continued)
5. (c) Capital expenditure by
segment (continued)
|
|
|
|
|
Six months ended 30
September 2023
|
|
|
Capital additions to
intangible assets
£m
|
Capital additions to
property, plant and equipment
£m
|
Capital Investment relating
to Joint Ventures and Associates (i)
£m
|
Allowances and
certificates
(ii)
£m
|
Customer funded
additions
(iii)
£m
|
Lease asset
additions
(iv)
£m
|
Share of non-controlling
interests (v)
£m
|
Adjusted
Investment and Capital
Expenditure
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
SSEN Transmission
|
-
|
324.8
|
-
|
-
|
-
|
(1.4)
|
(80.8)
|
242.6
|
|
SSEN
Distribution
|
4.7
|
332.2
|
-
|
-
|
(91.4)
|
-
|
-
|
245.5
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
134.4
|
246.8
|
67.4
|
-
|
-
|
(1.5)
|
-
|
447.1
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
15.4
|
5.2
|
17.6
|
-
|
-
|
-
|
-
|
38.2
|
|
Gas
Storage
|
-
|
0.2
|
-
|
-
|
-
|
-
|
-
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
|
SSE
Business
Energy
|
27.8
|
-
|
-
|
-
|
-
|
-
|
-
|
27.8
|
|
SSE Airtricity
|
8.6
|
0.4
|
-
|
-
|
-
|
-
|
-
|
9.0
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
11.1
|
4.7
|
-
|
-
|
-
|
(0.6)
|
-
|
15.2
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
166.7
|
-
|
-
|
(163.3)
|
-
|
-
|
-
|
3.4
|
|
|
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
12.3
|
25.1
|
9.3
|
-
|
-
|
(21.4)
|
-
|
25.3
|
|
Total SSE
Group
|
381.0
|
939.4
|
94.3
|
(163.3)
|
(91.4)
|
(24.9)
|
(80.8)
|
1,054.3
|
i) Represents equity or debt
funding provided to joint ventures or associates in relation to
capital expenditure projects.
ii) Allowances and Certificates
consist of purchased carbon emissions allowances and generated or
purchased renewable obligations certificates (ROCs) and are not
included in the Group's Capital Expenditure and Investment
alternative performance measure.
iii) Represents removal of additions
to electricity and other networks funded by customer
contributions.
iv) Represents removal of additions
in respect of right of use assets recognised on the commencement
date of a lease arrangement.
v) Represents the share of capital
additions attributable to non-controlling interests.
5. Segmental information
(continued)
5. (c) Capital expenditure by
segment (continued)
|
|
|
|
Year ended 31 March
2024
|
|
|
|
|
|
Capital additions to
intangible assets
£m
|
Capital additions to
property, plant and equipment
£m
|
Capital Investment relating
to Joint Ventures and Associates (i)
£m
|
Allowances and
certificates
(ii)
£m
|
Customer funded
additions
(iii)
£m
|
Lease asset additions
(iv)
£m
|
Share of non-controlling
interests
(v)
£m
|
Adjusted
Investment and Capital
Expenditure
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
SSEN
Transmission
|
12.8
|
784.7
|
-
|
-
|
-
|
(2.5)
|
(199.4)
|
595.6
|
|
SSEN
Distribution
|
20.3
|
636.8
|
-
|
-
|
(152.0)
|
-
|
-
|
505.1
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
355.1
|
433.8
|
324.5
|
-
|
-
|
(16.3)
|
-
|
1,097.1
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
83.3
|
24.6
|
51.4
|
(59.7)
|
-
|
-
|
-
|
99.6
|
|
Gas
Storage
|
-
|
0.8
|
-
|
-
|
-
|
-
|
-
|
0.8
|
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
|
SSE
Business
Energy
|
43.7
|
-
|
-
|
-
|
-
|
-
|
-
|
43.7
|
|
SSE Airtricity
|
14.1
|
0.7
|
-
|
-
|
-
|
-
|
-
|
14.8
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
26.4
|
32.4
|
-
|
-
|
-
|
(7.8)
|
-
|
51.0
|
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
723.4
|
-
|
-
|
(714.8)
|
-
|
-
|
-
|
8.6
|
|
|
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
35.1
|
57.6
|
14.1
|
-
|
-
|
(46.4)
|
-
|
60.4
|
|
Total SSE
Group
|
1,314.2
|
1,971.4
|
390.0
|
(774.5)
|
(152.0)
|
(73.0)
|
(199.4)
|
2,476.7
|
i) Represents equity or debt
funding provided to joint ventures or associates in relation to
capital expenditure projects.
ii) Allowances and Certificates
consist of purchased carbon emissions allowances and generated or
purchased renewable obligations certificates (ROCs) and are not
included in the Group's Capital Expenditure and Investment
alternative performance measure.
iii) Represents removal of additions
to electricity and other networks funded by customer
contributions.
iv) Represents removal of additions
in respect of right of use assets recognised on the commencement
date of a lease arrangement.
v) Represents the share of capital
additions attributable to non-controlling interests.
5. Segmental information
(continued)
5. (d) Earnings/(losses) before
interest, taxation, depreciation and amortisation ('Adjusted
EBITDA')
|
|
|
30 September
2024
|
|
|
|
Adjusted operating profit
reported to the Board
|
Depreciation expense on fair
value uplifts
|
Depreciation/ impairment/
amortisation before exceptional charges
|
Joint venture/ Associate
share of depreciation and amortisation
|
Release of deferred
income
|
Share of non-controlling
interest depreciation and amortisation
|
Adjusted
EBITDA
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
SSEN
Transmission
|
157.5
|
-
|
72.1
|
-
|
(1.0)
|
(18.0)
|
210.6
|
|
SSEN
Distribution
|
346.3
|
-
|
105.2
|
-
|
(6.0)
|
-
|
445.5
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
335.6
|
(9.8)
|
94.5
|
67.1
|
-
|
-
|
487.4
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
(9.0)
|
(0.1)
|
44.1
|
20.7
|
-
|
-
|
55.7
|
|
Gas
Storage
|
(34.8)
|
-
|
0.4
|
-
|
-
|
-
|
(34.4)
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
SSE Business Energy
|
60.1
|
-
|
9.6
|
-
|
-
|
-
|
69.7
|
|
SSE Airtricity
|
70.6
|
-
|
8.2
|
-
|
-
|
-
|
78.8
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
(19.0)
|
-
|
4.9
|
-
|
(0.2)
|
-
|
(14.3)
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
14.1
|
-
|
3.2
|
-
|
-
|
-
|
17.3
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
(50.5)
|
-
|
45.7
|
-
|
(0.2)
|
-
|
(5.0)
|
|
Neos Networks
|
(10.7)
|
-
|
-
|
22.4
|
-
|
-
|
11.7
|
|
Total SSE
Group
|
860.2
|
(9.9)
|
387.9
|
110.2
|
(7.4)
|
(18.0)
|
1,323.0
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
5.
Segmental information (continued)
5.
(d) Earnings/(losses) before interest, taxation, depreciation and
amortisation ('Adjusted EBITDA') (continued)
|
|
|
30
September 2023
|
|
|
Adjusted operating profit reported to the Board
|
Depreciation expense on fair value uplifts
|
Depreciation/ impairment/ amortisation before exceptional
charges
|
Joint
venture/ Associate share of depreciation and
amortisation
|
Release of deferred income
|
Share
of non-controlling interest depreciation and
amortisation
|
Adjusted EBITDA
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
SSEN
Transmission
|
215.6
|
-
|
63.0
|
-
|
(1.0)
|
(15.7)
|
261.9
|
|
SSEN
Distribution
|
120.1
|
-
|
94.0
|
-
|
(4.9)
|
-
|
209.2
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
86.8
|
(9.4)
|
81.7
|
59.5
|
-
|
-
|
218.6
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
312.9
|
-
|
50.7
|
21.4
|
-
|
-
|
385.0
|
|
Gas
Storage
|
(86.7)
|
-
|
6.2
|
-
|
-
|
-
|
(80.5)
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
SSE Business Energy
|
88.0
|
-
|
3.3
|
-
|
-
|
-
|
91.3
|
|
SSE Airtricity
|
5.8
|
-
|
4.1
|
-
|
-
|
-
|
9.9
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
(8.4)
|
-
|
3.2
|
-
|
(0.2)
|
-
|
(5.4)
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
9.0
|
-
|
2.6
|
-
|
-
|
-
|
11.6
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
(35.2)
|
-
|
34.8
|
-
|
(0.3)
|
-
|
(0.7)
|
|
Neos Networks
|
(14.7)
|
-
|
-
|
23.4
|
-
|
-
|
8.7
|
|
Total SSE
Group
|
693.2
|
(9.4)
|
343.6
|
104.3
|
(6.4)
|
(15.7)
|
1,109.6
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
31
March 2024
|
|
|
Adjusted operating profit reported to the Board
|
Depreciation expense on fair value uplifts
|
Depreciation/ impairment/ amortisation before exceptional
charges
|
Joint
venture/ Associate share of depreciation and
amortisation
|
Release of deferred income
|
Share
of non-controlling interest depreciation and
amortisation
|
Adjusted EBITDA
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Continuing
operations
|
|
|
|
|
|
|
|
SSEN
Transmission
|
419.3
|
-
|
130.1
|
-
|
(2.0)
|
(32.5)
|
514.9
|
|
SSEN
Distribution
|
272.1
|
-
|
194.8
|
-
|
(9.9)
|
-
|
457.0
|
|
|
|
|
|
|
|
|
|
|
SSE
Renewables
|
833.1
|
(19.0)
|
171.9
|
121.6
|
-
|
-
|
1,107.6
|
|
|
|
|
|
|
|
|
|
|
SSE
Thermal
|
736.1
|
-
|
104.0
|
40.6
|
-
|
-
|
880.7
|
|
Gas
Storage
|
82.8
|
-
|
12.4
|
-
|
-
|
-
|
95.2
|
|
|
|
|
|
|
|
|
|
|
Energy Customer Solutions
|
|
|
|
|
|
|
|
|
SSE Business Energy
|
95.8
|
-
|
9.1
|
-
|
-
|
-
|
104.9
|
|
SSE Airtricity
|
95.0
|
-
|
5.1
|
-
|
-
|
-
|
100.1
|
|
|
|
|
|
|
|
|
|
|
SSE
Enterprise
|
(25.6)
|
-
|
10.2
|
-
|
(0.5)
|
-
|
(15.9)
|
|
|
|
|
|
|
|
|
|
|
SSE
Energy Markets
|
38.9
|
-
|
5.1
|
-
|
-
|
-
|
44.0
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
Corporate unallocated
|
(88.8)
|
-
|
82.2
|
-
|
(0.6)
|
-
|
(7.2)
|
|
Neos Networks
|
(32.3)
|
-
|
-
|
46.6
|
-
|
-
|
14.3
|
|
Total SSE
Group
|
2,426.4
|
(19.0)
|
724.9
|
208.8
|
(13.0)
|
(32.5)
|
3,295.6
|
|
|
|
|
|
|
|
|
|
|
|
| |
6. Exceptional items and
certain re-measurements
|
Year
ended 31 March
2024
£m
|
|
Six months ended
30 September 2024
£m
|
Six
months ended 30 September 2023
(restated*)
£m
|
|
Continuing
operations
|
|
|
Exceptional items (note
6.1)
|
|
|
|
(270.9)
|
Asset
impairments
|
(19.2)
|
(63.2)
|
|
-
|
Other
exceptional provisions and charges
|
(2.7)
|
(50.5)
|
|
4.9
|
Net
gains on disposals/acquisitions of businesses and other
assets
|
0.3
|
0.2
|
|
(266.0)
|
Total exceptional
items
|
(21.6)
|
(113.5)
|
|
|
Certain re-measurements
(note 6.2)
|
|
|
|
452.2
|
Movement on operating derivatives
|
118.7
|
64.9
|
|
9.1
|
Movement in fair value of commodity stocks
|
-
|
(4.6)
|
|
6.1
|
Movement on financing derivatives
|
(4.6)
|
41.0
|
|
46.1
|
Share of movement on derivatives in jointly controlled
entities (net of tax)
|
(24.2)
|
(8.0)
|
|
513.5
|
Total certain
re-measurements
|
89.9
|
93.3
|
|
247.5
|
Exceptional items and
certain re-measurements on continuing operations before
taxation
|
68.3
|
(20.2)
|
|
|
Taxation
|
|
|
|
23.3
|
Taxation on other exceptional items
|
3.1
|
3.2
|
|
(115.0)
|
Taxation on certain re-measurements
|
(27.7)
|
(23.9)
|
|
(91.7)
|
Taxation
|
(24.6)
|
(20.7)
|
|
155.8
|
Total exceptional items and
certain re-measurements on continuing operations after
taxation
|
43.7
|
(40.9)
|
|
|
|
|
|
|
|
Exceptional items and
certain re-measurements are disclosed across the following
categories within the income statement:
|
|
|
|
Year
ended 31 March
2024
£m
|
|
Six months ended
30 September 2024
£m
|
Six
months ended 30 September 2023
(restated*)
£m
|
|
Continuing
operations
|
|
|
Cost of
sales:
|
|
|
|
452.2
|
Movement on operating derivatives (note 16)
|
118.7
|
64.9
|
|
9.1
|
Movement in fair value of commodity stocks
|
-
|
(4.6)
|
|
461.3
|
|
118.7
|
60.3
|
|
|
Operating
costs:
|
|
|
|
(270.9)
|
Asset impairments
|
(19.2)
|
(63.2)
|
|
-
|
Other exceptional provisions and charges
|
(2.7)
|
(50.5)
|
|
(270.9)
|
|
(21.9)
|
(113.7)
|
|
|
Operating
income:
|
|
|
|
4.6
|
Net gains on disposals of businesses and other
assets
|
-
|
-
|
|
4.6
|
|
-
|
-
|
|
|
Joint ventures and
associates:
|
|
|
|
46.1
|
Share of movement on derivatives in jointly controlled
entities (net of tax)
|
(24.2)
|
(8.0)
|
|
46.1
|
|
(24.2)
|
(8.0)
|
|
241.1
|
Operating
profit:
|
72.6
|
(61.4)
|
|
|
Finance
costs
|
|
|
|
6.1
|
Movement on financing derivatives (note 16)
|
(4.6)
|
41.0
|
|
0.3
|
Interest income on deferred consideration
receipt
|
0.3
|
0.2
|
|
6.4
|
|
(4.3)
|
41.2
|
|
247.5
|
Profit before
taxation on continuing operations
|
68.3
|
(20.2)
|
*The
comparative has been restated. See note 2(v).
6.
Exceptional items and certain re-measurements
(continued)
6.1 Exceptional
items
Exceptional items recognised
within continuing operations in the current financial period ended
30 September 2024
i) Enerveo
Limited
On 3
October 2024, subsequent to the balance sheet date, the Group
entered into an agreement with HUK 144 Limited, a subsidiary of
Hilco Capital Limited, to dispose of the Infrastructure Solutions
component of Enerveo Limited ("Enerveo") for consideration of £1
less costs. The Group has assessed that the criteria of IFRS 5
"Non-current Assets Held for Sale and Discontinued Operations" to
be classified as held for sale were met by the Infrastructure
Solutions component as at 30 September 2024. The Group has
recognised an exceptional charge of £19.2m to reflect the
impairment of the assets to fair value and a provision for £2.7m of
pre-tax related disposal costs. The current period charges have
been treated as exceptional to align the treatment with previously
recognised exceptional charges associated with Enerveo. The results
of the Infrastructure Solutions business are immaterial to the
Group and therefore have not been separately disclosed as a
discontinued operation. The transaction is expected to complete in
the second half of the year. The Group has retained the Highway
Electricals component of Enerveo as a continuing operation. The
results of the retained component are also immaterial to the Group
and will be reported as part of Corporate Unallocated.
ii) Other
credits
At 30
September 2024, the Group recognised a final exceptional credit of
£0.3m relating to the unwind of discounting on deferred
consideration recognised as an exceptional item on the part
disposal of SSE Slough Multifuel Limited in the year ended 31 March
2021. The deferred consideration of £7.0m was paid on commissioning
of the plant.
Taxation
The
Group has separately recognised the tax effect of the exceptional
items summarised above.
Exceptional items in the
year ended 31 March 2024
i) Triton Power 50% joint
venture - investment impairment charge
At 31
March 2024 the Group recognised an impairment charge of £63.2m
against the carrying value of the Group's investment in Triton
Power Holdings Limited, reflecting future market price
assumptions.
ii) Gas Storage - impairment
charge
The
Group performed a formal impairment review at 31 March 2024 to
reassess the carrying value of its Gas Storage operations at
Aldbrough and Atwick. As a result of the assessment, the Group
recognised an exceptional impairment charge of £85.7m to the
carrying value of the assets at Aldbrough and £48.4m to the
carrying value of the assets at Atwick.
iii) Neos Networks 50% joint
venture - impairment charge
At 31
March 2024, the Group performed a formal impairment assessment on
the carrying value of its 50% joint venture investment, including
shareholder loan balances, in Neos Networks Limited. The assessment
indicated that the recoverable amount of the investment and
shareholder loan receivable balances were impaired by
£73.6m.
iv) Enerveo
acquisition
On 22
March 2024, the Group purchased the entire share capital of Enerveo
from Aurelius Antelope Limited ("Aurelius") for cash consideration
of £1.0m. Completion of the transaction resulted in an exceptional
credit of £4.6m being recognised on acquisition during the year
ended 31 March 2024.
6.2 Certain
re-measurements
The
Group, through its SSE Energy Markets business, enters into forward
commodity purchase (and sale) contracts to meet the future demand
requirements of its SSE Business Energy and SSE Airtricity supply
businesses, to optimise the value of its SSE Renewables and SSE
Thermal power generation assets or to conduct other trading subject
to the value at risk limits set out by the Energy Markets Risk
Committee. Certain of these contracts (predominately electricity,
gas and other commodity purchase contracts) are determined to be
derivative financial instruments under IFRS 9 "Financial
Instruments" and as such are required to be recorded at their fair
value. Conversely, commodity contracts that are not financial
instruments under IFRS 9 (predominately electricity sales
contracts) are accounted for as 'own use' contracts and are not
recorded at fair value. Inventory purchased to utilise excess
capacity ahead of an optimised sale in the market by the Gas
Storage business is held as trading inventory at fair value with
changes in value recognised within 'certain re-measurements'. In
addition, the mark-to-market valuation movements on the Group's
contracts for difference contracts entered into by SSE Renewables
that are not designated as government grants, and which are
measured as Level 3 fair value financial instruments, are also
included within 'certain re-measurements'.
Changes in the fair value of those commodity contracts
designated as financial instruments and trading inventory are
therefore reflected in the income statement. The Group shows the
change in the fair value of these forward contracts and trading
inventory separately as "certain re-measurements", as the Group
does not believe this mark-to-market movement is relevant to the
underlying performance of its businesses.
At 30
September 2024, changes in global commodities markets and in SSE's
contractual positions have resulted in favourable net
mark-to-market remeasurement on commodity contracts designated as
financial instruments, contracts for difference contracts and
trading inventory of £118.7m (gain) (2023: £60.3m gain (restated),
March 2024: £461.3m gain). The net IFRS 9 position on operating
derivatives at 30 September 2024 is an asset of £169.9m (2023:
£336.4m liability (restated); March 2024: £51.4m asset).
6. Exceptional
items and certain re-measurements (continued)
The
mark-to-market gain in the period has resulted in a tax charge of
£27.7m (2023: £23.9m charge (restated), March 2024: £115.0m
charge), which has been reported separately as part of certain
re-measurements. In addition, the Group has recognised losses of
£4.6m (2023: £41.0m gains, March 2024: £6.1m gains) on the
remeasurement of the certain interest rate and foreign exchange
contracts through the income statement. Losses on the remeasurement
of cash flow hedge accounted contracts of £8.3m (2023: £41.3m gain,
March 2024: £6.5m gain) and losses on the equity share of the
remeasurement of cash flow hedge accounted contracts in joint
ventures of £27.4m (2023: £84.4m gains, March 2024: £40.9m losses)
have been recognised in other comprehensive income.
The
re-measurements arising from IFRS 9 and the associated deferred tax
are disclosed separately to aid understanding of the underlying
performance of the Group.
7. Finance
income and costs
|
Year
ended 31 March
2024
|
|
Six months ended 30
September 2024
|
Six
months ended 30 September 2023
|
|
£m
|
|
£m
|
£m
|
|
|
Finance
income:
|
|
|
|
60.3
|
Interest income from short term deposits
|
11.6
|
32.4
|
|
26.2
|
Interest on net pension assets
|
10.2
|
12.8
|
|
|
Other
interest receivable:
|
|
|
|
78.4
|
Joint
ventures and associates
|
60.1
|
34.4
|
|
34.2
|
Other
receivable
|
15.9
|
24.2
|
|
112.6
|
|
76.0
|
58.6
|
|
199.1
|
Total finance
income
|
97.8
|
103.8
|
|
|
|
|
|
|
|
Finance
costs:
|
|
|
|
(77.4)
|
Bank
loans and overdrafts
|
(28.0)
|
(37.1)
|
|
(274.3)
|
Other
loans and charges
|
(146.6)
|
(144.0)
|
|
(25.2)
|
Notional interest arising on discounted provisions
|
(13.2)
|
(11.0)
|
|
(25.8)
|
Lease
charges
|
(11.0)
|
(11.7)
|
|
84.4
|
Less:
interest capitalised
|
48.7
|
30.0
|
|
(318.3)
|
Total finance
costs
|
(150.1)
|
(173.8)
|
|
6.1
|
Changes in fair value of financing derivative assets or
liabilities at fair value through profit or loss
|
(4.6)
|
41.0
|
|
(113.1)
|
Net finance
costs
|
(56.9)
|
(29.0)
|
|
|
Presented as:
|
|
|
|
205.2
|
Finance
income
|
97.8
|
144.8
|
|
(318.3)
|
Finance
costs
|
(154.7)
|
(173.8)
|
|
(113.1)
|
Net finance
costs
|
(56.9)
|
(29.0)
|
Adjusted net finance costs are arrived at after the following
adjustments:
|
Year
ended 31 March
2024
|
|
Six months ended 30
September
2024
|
Six
months ended 30
September
2023
|
|
£m
|
|
£m
|
£m
|
|
|
|
|
|
|
(113.1)
|
Net finance
costs
|
(56.9)
|
(29.0)
|
|
|
(add)/less:
|
|
|
|
(110.7)
|
Share
of interest from joint ventures and associates
|
(86.2)
|
(47.8)
|
|
(26.2)
|
Interest on net pension assets
|
(10.2)
|
(12.8)
|
|
(6.1)
|
Movement on financing derivatives (note 16)
|
4.6
|
(41.0)
|
|
(0.3)
|
Exceptional item
|
(0.3)
|
(0.2)
|
|
4.7
|
Share
of net finance cost attributable to non-controlling
interests
|
3.3
|
2.8
|
|
(251.7)
|
Adjusted net finance
costs
|
(145.7)
|
(128.0)
|
|
|
|
|
|
|
25.2
|
Notional interest arising on discounted provisions
|
13.2
|
11.0
|
|
25.8
|
Lease
charges
|
11.0
|
11.7
|
|
(73.1)
|
Hybrid coupon payment
|
(73.7)
|
(73.1)
|
|
(273.8)
|
Adjusted net finance costs
for interest cover calculations
|
(195.2)
|
(178.4)
|
8.
Taxation
The
income tax expense for the interim period is calculated in
accordance with the principles of IAS 34, where the forecast
effective rate of tax for the year is applied to the profits for
the period, with discrete items arising in the interim period being
separately treated.
The
income tax expense reflects the anticipated effective rate of tax
on profits before taxation for the Group for the year ending 31
March 2025, taking account of the movement in the deferred tax
provision in the period so far as it relates to items recognised in
the income statement. The reported tax rate on the profit before
tax before exceptional items and certain re-measurements on
continuing operations is 24.3% (2023: 21.3%, March 2024: 23.1%).
The reported tax rate on the profit before tax after exceptional
items and certain remeasurements is 25.2% (2023: 25.3% restated,
March 2024: 24.5%).
The
charge recognised in the income statement is as follows:
|
|
Six months ended 30
September 2024
|
Six
months ended 30 September 2023
|
|
|
Before exceptional items and
remeasurements
£m
|
Exceptional items and
remeasurements
£m
|
Total
£m
|
Before exceptional items and remeasurements
£m
|
Exceptional items and remeasurements (restated*)
£m
|
Total
(restated*)
£m
|
|
Current
tax
|
|
|
|
|
|
|
|
Corporation tax
|
104.2
|
11.1
|
115.3
|
97.3
|
(6.9)
|
90.4
|
|
Adjustments in respect of previous periods
|
-
|
-
|
-
|
(15.0)
|
-
|
(15.0)
|
|
Total current
tax
|
104.2
|
11.1
|
115.3
|
82.3
|
(6.9)
|
75.4
|
|
Deferred
tax
|
|
|
|
|
|
|
|
Current period
|
84.5
|
13.5
|
98.0
|
52.9
|
27.6
|
80.5
|
|
Total deferred
tax
|
84.5
|
13.5
|
98.0
|
52.9
|
27.6
|
80.5
|
|
Total taxation
charge
|
188.7
|
24.6
|
213.3
|
135.2
|
20.7
|
155.9
|
|
|
|
|
|
|
|
| |
|
|
|
Year
ended 31 March 2024
|
|
|
|
|
|
Before exceptional items and remeasurements
£m
|
Exceptional items and remeasurements
£m
|
Total
£m
|
|
Current
tax
|
|
|
|
|
|
|
|
Corporation tax
|
|
|
|
366.1
|
(36.5)
|
329.6
|
|
Adjustments in respect of previous years
|
|
|
|
(25.6)
|
31.8
|
6.2
|
|
Total current
tax
|
|
|
|
340.5
|
(4.7)
|
335.8
|
|
Deferred
tax
|
|
|
|
|
|
|
|
Current year
|
|
|
|
155.3
|
128.2
|
283.5
|
|
Adjustments in respect of previous years
|
|
|
|
23.2
|
(31.8)
|
(8.6)
|
|
Total deferred
tax
|
|
|
|
178.5
|
96.4
|
274.9
|
|
Total taxation
charge
|
|
|
|
519.0
|
91.7
|
610.7
|
|
|
|
|
|
|
|
|
|
| |
The
'adjusted current tax charge' and the 'adjusted effective rate of
tax', which are presented in order to best represent underlying
performance by making similar adjustments to the 'adjusted profit
before tax' measure, are arrived at after the following
adjustments:
|
Year
ended
31 March 2024
|
|
Six months ended
30 September 2024
|
Six
months ended
30 September 2023 (restated*)
|
|
£m
|
%
|
|
£m
|
%
|
£m
|
%
|
|
|
|
Continuing
operations
|
|
|
|
|
|
610.7
|
25.6
|
Group
tax charge and effective rate
|
213.3
|
24.5
|
155.9
|
24.7
|
|
(274.9)
|
(11.5)
|
Add:
reported deferred tax charge and effective rate
|
(98.0)
|
(11.3)
|
(80.5)
|
(12.8)
|
|
335.8
|
14.1
|
Reported current tax charge and effective rate
|
115.3
|
13.2
|
75.4
|
11.9
|
|
|
1.3
|
Effect
of adjusting items
|
|
2.9
|
|
1.4
|
|
335.8
|
15.4
|
Reported current tax charge and effective rate on adjusted
basis
|
115.3
|
16.1
|
75.4
|
13.3
|
|
|
|
add:
|
|
|
|
|
|
38.5
|
1.8
|
Share of current tax from joint ventures and associates
|
(13.7)
|
(1.9)
|
10.5
|
1.9
|
|
|
|
less:
|
|
|
|
|
|
4.7
|
0.2
|
Current tax charge on exceptional items
|
(11.1)
|
(1.6)
|
6.9
|
1.2
|
|
(8.0)
|
(0.3)
|
Share of current tax attributable to non-controlling
interests
|
5.5
|
0.8
|
(4.4)
|
(0.8)
|
|
371.0
|
17.1
|
Adjusted current tax charge
and effective rate
|
96.0
|
13.4
|
88.4
|
15.6
|
*The
comparative has been restated. See note 2(v).
The
adjusted effective current tax rate for the period after adjusting
for discrete events arising in the first half of the year is 13.4%
(2023: 15.6%). The forecast full-year effective current tax rate is
expected to be 13.4%.
8.
Taxation (continued)
Change in UK corporation tax
rates
There
are no announced or enacted changes in corporation tax rates in the
interim period.
Finance Bill 2023 introduced legislation, initially as a
temporary measure but then being made permanent in the Autumn
Statement, to allow 'Full Expensing' of 100% General Pool plant and
machinery, alongside 50% for Special Rate Pool plant and machinery.
These changes significantly increase the deductions for Capital
Allowances on capital expenditure incurred from 1 April
2023.
Finance Act (No.2) 2023 also introduced legislation in
respect of Multinational Top-up Tax in line with OECD BEPS Pillar
Two principles. The Group has applied the exemption from
recognising and disclosing information about deferred tax assets
and liabilities related to Pillar Two income taxes as required by
the amendments to IAS 12 - International Tax Reform - Pillar Two
Model Rules, which was issued in May 2023. The legislation is in
force for the year ended 31 March 2025, including this interim
period. Similar draft legislation has been introduced in the
Republic of Ireland and other EU jurisdictions. The Group has
undertaken modelling and does not expect a material impact to arise
as tax rates, including deferred tax, in the countries in which the
Group operates are expected to exceed 15%.
9.
Dividends
Ordinary
dividends
|
Year
ended 31 March 2024
|
|
Six months ended 30
September 2024
|
Six
months ended 30 September 2023
|
|
Total
£m
|
Settled via scrip £m
|
Pence
per ordinary share
|
|
Total
£m
|
Settled
via scrip
£m
|
Pence per ordinary
share
|
Total £m
|
Settled
via
scrip £m
|
Pence
per ordinary share
|
|
-
|
-
|
-
|
Final
- year ended 31 March 2024
|
437.3
|
225.5
|
40.0
|
-
|
-
|
-
|
|
218.3
|
8.8
|
20.0
|
Interim - year ended 31 March 2024
|
-
|
-
|
-
|
-
|
-
|
-
|
|
738.1
|
29.8
|
67.7
|
Final
- year ended 31 March 2023
|
-
|
-
|
-
|
738.1
|
29.8
|
67.7
|
|
956.4
|
38.6
|
|
|
437.3
|
225.5
|
|
738.1
|
29.8
|
|
The
final dividend of 40.0p per ordinary share declared in respect of
the financial year ended 31 March 2024 (2023: 67.7p) was approved
at the Annual General Meeting on 18 July 2024 and was paid to
shareholders on 19 September 2024. Shareholders were able to elect
to receive ordinary shares credited as fully paid instead of the
cash dividend under the terms of the Company's scrip dividend
scheme.
For
dividends paid in relation to the financial year ended 31 March
2022 and in relation to the subsequent years to 31 March 2027, the
Group's policy is to repurchase shares to reduce the scrip's
dilutive effects, if the scrip take-up exceeds 25% of the full year
dividend in any given year. The overall scrip dividend take-up for
the financial year ended 31 March 2024 was 35.7% (March 2023: 18.0%
- no Scrip buyback). SSE initiated a share buyback in the period
following the final dividend payment for the year ended 31 March
2024. The number of ordinary shares to be purchased will not exceed
3,806,467 ordinary shares, and the maximum amount allocated to the
Scrip buyback is £75.0m. SSE completed the Share buyback process on
16 October 2024.
An
interim dividend of 21.2p per ordinary share has been proposed and
is due to be paid on 27 February 2025 to those shareholders on the
SSE plc share register on 3 January 2025. The proposed interim
dividend has not been included as a liability in these financial
statements. A scrip dividend will be offered as an
alternative.
10. Earnings per
share
Basic earnings per
share
The
calculation of basic earnings per ordinary share at 30 September
2024 is based on the net profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares
outstanding during the period ended 30 September 2024.
Adjusted earnings per
share
Adjusted earnings per share has been calculated by excluding
the charge for deferred tax, interest on net pension assets under
IAS 19, retained Gas Production decommissioning costs, the
depreciation expense on fair value uplifts, the share of profit
attributable to non-controlling interests and the impact of
exceptional items and certain re-measurements.
10.
Earnings per share (continued)
Continuing
operations
|
Year
ended
31 March 2024
|
|
Six months ended
30 September 2024
|
Six
months ended
30 September 2023
(restated*)
|
|
Earnings
£m
|
Earnings per share
pence
|
|
Earnings
£m
|
Earnings per
share
pence
|
Earnings
£m
|
Earnings per share
pence
|
|
1,710.5
|
156.7
|
Basic earnings attributable
to ordinary shareholders on continuing operations used to calculate
adjusted EPS
|
522.1
|
47.7
|
335.1
|
30.7
|
|
(155.8)
|
(14.3)
|
Exceptional items and certain re-measurements (note
6)
|
(43.7)
|
(4.0)
|
40.9
|
3.7
|
|
1,554.7
|
142.4
|
Basic
excluding exceptional items and certain re- measurements
|
478.4
|
43.7
|
376.0
|
34.4
|
|
|
|
Adjusted
for:
|
|
|
|
|
|
9.9
|
0.9
|
Gas
Production decommissioning provision movement
|
(10.8)
|
(1.0)
|
(3.5)
|
(0.3)
|
|
19.0
|
1.7
|
Depreciation expense on fair value uplifts
|
9.9
|
0.9
|
9.4
|
0.9
|
|
(26.2)
|
(2.4)
|
Interest on net pension assets (note 7)
|
(10.2)
|
(0.9)
|
(12.8)
|
(1.2)
|
|
178.5
|
16.3
|
Deferred tax
|
84.5
|
7.7
|
52.9
|
4.9
|
|
20.3
|
1.9
|
Deferred tax from share of joint ventures and
associates
|
10.8
|
1.0
|
(12.8)
|
(1.2)
|
|
(25.6)
|
(2.3)
|
Deferred tax on non-controlling interest
|
(17.8)
|
(1.6)
|
(5.5)
|
(0.5)
|
|
1,730.6
|
158.5
|
Adjusted
|
544.8
|
49.8
|
403.7
|
37.0
|
Reported earnings per
share
|
Year
ended
31 March 2024
|
|
Six months ended
30 September 2024
|
Six
months ended
30 September 2023
(restated*)
|
|
|
Earnings
£m
|
Earnings per share
pence
|
|
Earnings
£m
|
Earnings per
share
pence
|
Earnings
£m
|
Earnings per share
pence
|
|
1,710.5
|
156.7
|
Basic earnings per share
attributable to ordinary shareholders
|
522.1
|
47.7
|
335.1
|
30.7
|
|
-
|
(0.2)
|
Dilutive effect of
outstanding share options
|
-
|
(0.1)
|
-
|
-
|
|
1,710.5
|
156.5
|
Diluted
|
522.1
|
47.6
|
335.1
|
30.7
|
|
|
|
|
|
|
|
| |
*The
comparative has been restated. See note 2(v).
The
weighted average number of shares used in each calculation is as
follows:
|
Year
ended 31 March 2024
Number of shares
(millions)
|
|
Six months
ended
30 September
2024
Number of
shares
(millions)
|
Six
months ended
30
September 2023
Number of shares
(millions)
|
|
1,091.8
|
For
basic and adjusted earnings per share
|
1,094.2
|
1,090.4
|
|
1.5
|
Effect of exercise of share options
|
2.2
|
2.0
|
|
1,093.3
|
For
diluted earnings per share
|
1,096.4
|
1,092.4
|
|
|
11. Acquisitions
and disposals
Acquisitions and disposals
in the current period
There
have been no significant acquisitions and disposals in the current
period.
During the period ended 30 September 2024, the Group made an
asset acquisition (of a special purchase vehicle as opposed to a
business) for cash consideration of £15.4m and sold a 50% equity
share in SSE DE EV Hold Co Limited to form a 50:50 joint venture
with TotalEnergies Marketing UK Limited for cash consideration of
£16.5m.
11. Acquisitions
and disposals (continued)
Prior year
acquisitions
Enerveo
acquisition
On 22
March 2024, the Group completed the acquisition of Enerveo from
Aurelius for cash consideration of £1.0m. Enerveo (formerly named
SSE Contracting Limited) is a former subsidiary of the Group that
was disposed to Aurelius on 30 June 2021. The reacquisition of
Enerveo resulted in a gain of £4.6m in the year ended 31 March
2024, which was recognised as an exceptional item. Following
completion, SSE restructured and settled external liabilities
totalling £15.2m and settled certain balances of £30.9m due to SSE
companies which are included in the acquired balances below. At 31
March 2024, the goodwill balance of £5.6m implied by the
transaction was written off. This write-off was included within the
total gain of £4.6m referred to above. The following table
summarises the assets and liabilities acquired in the
transaction.
|
|
Fair value
at
22 March
2024
|
|
|
£m
|
|
Assets acquired and
liabilities assumed
|
|
|
Property, plant and equipment
|
11.7
|
|
Intangible assets
|
2.5
|
|
Inventories
|
3.9
|
|
Trade
and other receivables
|
40.1
|
|
Prepayments and accrued income
|
55.1
|
|
Cash
|
13.2
|
|
Trade
and other payables
|
(91.0)
|
|
Deferred income
|
(20.0)
|
|
Lease
liabilities
|
(12.8)
|
|
Provisions
|
(7.3)
|
|
Total
net liabilities acquired
|
(4.6)
|
|
Goodwill
|
5.6
|
|
Cash
consideration
|
1.0
|
As
referred to at note 6.1(i), on 3 October 2024, the Group entered
into an agreement with HUK 144 Limited to dispose of the
Infrastructure Solutions component of Enerveo for consideration of
£1 less costs. The transaction is expected to complete in the
second half of the year.
12. Impairment
testing
At 30
September 2024, the Group has reviewed the carrying value of
certain assets and has assessed whether there are any indicators
that an impairment may have arisen. Where an impairment indicator
exists, then a formal impairment assessment has been
performed.
The
Group has an early-stage renewable development portfolio in
Southern Europe which is sensitive to changes in certain
assumptions supporting the Group's valuation. During the period to
30 September 2024, discount rates in Southern Europe have
increased, and the Group has experienced some delays in progressing
projects through the planning and consenting processes. These
factors were considered impairment triggers, necessitating a formal
impairment review.
The
Group also holds a 50% investment stake in Triton Power Holdings
Limited ('Triton'), following its acquisition on 1 September 2022.
While the investment is an equity accounted joint venture, the
investment has been impaired in previous periods and is sensitive
to market movements. During the period, there has been a decrease
in short term observable spark spreads, offset by increases in
Capacity Mechanism price assumptions. The movements in these
assumptions have been considered impairment triggers, necessitating
a formal impairment review. The Group's remaining CCGT fleet are
held at historic cost and displayed significant headroom during the
31 March 2024 impairment review. Therefore, while the movements in
spark spreads and Capacity Mechanism prices have been considered
impairment triggers
or
the Group's investment in Triton, the Group's remaining CCGT fleet
continue to demonstrate headroom above their carrying values and
have not been included in the review below.
|
12. Impairment
testing (continued)
The results of the
impairment assessments in relation to SSE Southern Europe and
Triton were as follows:
|
|
|
|
|
|
|
Assets
|
Cash flow period
assumption
|
Operating and other
valuation assumptions
|
Commentary and impairment
conclusions
|
|
SSE Southern
Europe
|
Period to end of life of
portfolio assets
|
Modelling methodology and
assumptions
A discounted cash flow
analysis is used to test the carrying value of £405.1m of goodwill
(March 2024: £416.8m) and £145.6m of capitalised development assets
(March 2024: £120.5m) for impairment. As the Southern Europe
platform is in early-stage development, the assessment was based on
the discounted pre-tax cash flows using a comparable methodology to
the acquisition model but updated to reflect changes to specific
project circumstances and wider market developments since
acquisition.
The Southern Europe CGU
includes cashflows for early-stage development assets, being 77
individual windfarm and co-located solar projects across Spain,
France, Italy and Greece that have been assigned a probability of
success. While there are other projects in the portfolio, these
have not been assigned a probability of success and have been
excluded from the valuation.
Cashflows for the CGUs are
based on the expected average annual generation output for each
project, valued using forward power price projections. These
factors are subject to management review. The prices applied to
projected outputs are based on observable market information as at
30 September 2024.
Assumptions have also been
made on the Spanish, French, Italian and Greek government's support
for the development of wind projects and expected governmental
support under CfD subsidies. Cash outflows are based on planned and
expected maintenance profiles and other capital or replacement
costs.
The cash flow projections
are based on European power prices between €40 - €172 per MWh
(March 2024: €38 - €141 per MWh) and have been discounted applying
a pre-tax real discount rate between 6.6% and 7.5% (March 2024:
6.2% and 6.7%) based on technology and market
risks.
|
Impairment
conclusion
The recoverable amount of
the Southern Europe windfarm CGU is £557.4m (March 2024: £572.8m),
resulting in minimal headroom. While the recoverable amount
reflects current market challenges, it continues to exceed the
carrying value of the goodwill and intangible development assets.
Therefore, no impairment has been recognised at 30 September
2024.
The impairment assessment is
highly sensitive to fluctuations in key assumptions due to the
relatively small headroom above carrying value. The Group continues
to monitor both the portfolio and the Southern European market
closely for further developments.
Sensitivity
analysis
The principal assumptions
impacting the valuation model of the Southern Europe windfarm CGU
are generation volume; development probability of success; discount
rate; and power price.
While cash flow projections
are subject to inherent uncertainty, a 10% reduction in greenfield
generation volume was modelled which indicated an impairment of
£25.8m (March 2024: headroom of £3.4m).
A 5% reduction in the
probability of success attributed to the development projects would
result in an impairment of £62.4m (March 2024: impairment of
£2.6m).
An increase of 0.1% in the
respective pre-tax real discount rates (Spain: 6.6% France: 7.5%,
Italy: 7.2% and Greece: 7.1%) results in an impairment of £20.8m
and a 0.5% increase in the respective pre-tax real discount rates
indicates an impairment of £120.6m (March 2024: impairment of
£100.0m).
The Group has assessed that
many of the projects in Spain, Italy and France will obtain a
revenue support contract. If this assumption were changed and the
projects were developed on a merchant basis, the price assumptions
applied in the model would increase, although would likely be
offset by a compensatory increase in the discount rate. A £0.1m
impairment would be recognised if the projects are developed on a
merchant basis and power prices decrease by 3.8%.
|
|
12. Impairment testing
(continued)
|
|
|
|
Assets
|
Cash flow period
assumption
|
Operating and other valuation
assumptions
|
Commentary and impairment
conclusions
|
|
Equity investment in Triton
Power Holdings Limited
|
Period to end of
life
|
Modelling methodology and
assumptions
The Group has valued its 50%
equity investment in Triton based on projected cashflows that will
be derived from the joint venture investment on a value in use
('VIU') basis.
The VIU assessment of the
Triton power stations (Saltend, Indian Queens and Deeside) is used
to test the carrying value of the equity investment of £136.4m
(2024: £152.5m). The assessments were based on pre-tax discounted
cash flows expected to be generated by each power station, based on
management's view of operating prospects and operational
flexibility within the GB wholesale market, including capacity
market clearing prices. Cash flows are subject to a pre-tax real
discount rate of 13.0% (blended) (2024: 13.2%
(blended)).
|
Conclusion
The recoverable amount of
the Group's equity investment in Triton is £139.1m (2024: £153.9m),
which is £2.7m higher than the carrying value. As the difference is
low and has been assessed as part of a range of positive and
negative reasonable possible outcomes, no adjustment has been
recognised at 30 September 2024.
The Group acquired its
investment in Triton on 1 September 2022 during a period of
significant volatility in the UK power market. On acquisition the
Group recorded an exceptional gain on acquisition due to movements
in short term gas and power prices between the purchase agreement
and completion dates. While the investment is an equity accounted
joint venture, the investment has been impaired in previous periods
and is sensitive to market movements.
Sensitivity
analysis
The principal assumptions
impacting the valuation model of Triton are discount rate; gross
margin; and non-contracted capacity market price.
A 0.5% increase in the
discount rate would result in an impairment at 30 September 2024 of
£1.6m. A 0.5% decrease in the discount rate would increase the
headroom from £2.7m to £7.2m and the impairment reversal would be
recognised.
A 20% increase in gross
margin would result in an impairment reversal of £22.3m, and a 20%
decrease in gross margin would result in an impairment of
£17.9m.
A £10/KW increase in
non-contracted capacity market price would result in an impairment
reversal of £17.8m, and a £10/KW decrease would result in an
impairment charge of £12.5m.
|
13. Sources of
finance
13.1 Capital
management
The
Board's policy is to maintain a strong balance sheet and credit
rating to support investor, counterparty and market confidence in
the Group and to underpin future development of the business. The
Group's credit ratings are also important in maintaining an
efficient cost of capital and in determining collateral
requirements throughout the Group. As at 30 September 2024, the
Group's long term credit rating was BBB+ positive outlook for
Standard & Poor's and Baa1 stable outlook for Moody's. The
Group is also BBB+ stable outlook with Fitch however this rating is
on an unsolicited basis.
The
maintenance of a medium-term corporate model is a key control in
monitoring the development of the Group's capital structure and
allows for detailed scenarios and sensitivity testing. Key ratios
drawn from this analysis underpin regular updates to the Board and
include the ratios used by the rating agencies in assessing the
Group's credit ratings.
The
Group's debt requirements are principally met through issuing bonds
denominated in Sterling and Euros as well as private placements and
medium-term bank loans including those with the European Investment
Bank.
SSE's
adjusted net debt and hybrid capital was £9.8bn at 30 September
2024, compared with £9.4bn at 31 March 2024.
13. Sources of
finance (continued)
Adjusted net debt and hybrid capital is stated after removing
lease obligations, external net debt attributable to
non-controlling interests and cash held and posted as collateral in
line with the Group's presentation basis which is explained at note
2(i). The adjustment related to the non-controlling interest share
of Scottish Hydro Electric Transmission plc external net debt is
£586.2m at 30 September 2024 (2023: £454.2m; March 2024: £490.2m)
and relates to 25% of external loans of £2,930.1m (2023: £1,815.1m;
March 2024: £2,088.0m) net of cash and cash equivalents of £585.4m
(2023: £1.6m overdrawn; March 2024: cash equivalent of £127.4m).
Cash held and posted as collateral refers to amounts received and
deposited on commodity trading exchanges which are reported within
'Trade and other payables' and 'Trade and other receivables'
respectively on the face of the balance sheet.
At 30
September 2024 the collateral balance was a net liability of
£260.2m, consisting of a liability of £264.6m and an asset of £4.4m
(2023: £140.6m asset, March 2024: £353.2m net liability). The
movement since March 2024 reflects a reduction in the variation
margin on 'in the money' positions due to higher commodity prices
in the six months, along with 'in the money' positions maturing
during the period.
Borrowing
facilities
The
Group has an established €1.5bn Euro commercial paper programme
(paper can be issued in a range of currencies and swapped into
Sterling) and as at 30 September 2024 there was £799m commercial
paper outstanding (March 2024: £840m).
As at
30 September 2024, the Group continues to have access to £3.5bn of
revolving credit facilities (March 2024: £3.5bn), which includes
£750m (March 2024: £750m) relating to Scottish Hydro Electric
Transmission plc. As at 30 September 2024 there were no drawings
against these committed facilities (March 2024: nil
utilisation).
The
details of the five committed facilities as at 30 September 2024
are:
· a
£1.3bn revolving credit facility for SSE plc maturing March 2026
(March 2024: £1.3bn);
· a
£0.2bn bilateral facility for SSE plc maturing October 2026 (March
2024: £0.2bn);
· a
£0.75bn facility for Scottish Hydro Electric Transmission plc
maturing November 2026 (March 2024: £0.75bn);
· a
£0.25bn facility for Scottish Hydro Electric Distribution plc and
Southern Electric Power Distribution plc maturing November 2026
(March 2024: £0.25bn); and
· a
£1.0bn committed facility for SSE plc maturing February 2025 (March
2024: £1.0bn).
At 30
September 2024, the £1.3bn revolving credit facility and £0.2bn
bilateral facility were both in place to provide back-up to the
commercial paper programme and support the Group's capital
expenditure plans. The Transmission and Distribution related
facilities were in place to help cover the capital expenditure and
working capital of those businesses. The £1bn committed facility
for SSE plc provided cover for potential cash collateral
requirements. At 30 September 2024 and 31 March 2024 there were no
drawings on the SSE plc, Distribution and Transmission
facilities.
On 23
October 2024 the above facilities have been re-financed with the
£0.75bn facility relating to Scottish Hydro Electric Transmission
plc being increased to £1.5bn, and the £2.75bn of facilities
relating to SSE plc and Distribution being reduced to £1.5bn. This
reduction relates to the cancellation of the £1.0bn facility due to
mature in February 2025, and the £0.25bn Distribution facility that
is no longer required.
This
results in the Group having the following committed
facilities:
· a
£1.5bn revolving credit facility for SSE plc maturing October 2029
with two 1 year extension options; and
· a
£1.5bn revolving credit facility for Scottish Hydro Electric
Transmission plc maturing October 2029 with two 1 year extension
options.
Debt maturities and new debt
issued
During the period, SSE plc issued £0.8bn of debt and had
£1.0bn of debt maturities. The £0.8bn of issued debt relates to
Commercial Paper being rolled at maturity, which also accounts for
£0.8bn of the debt maturities, with the only additional debt
maturity being €320m (£204m) of 12 year US Private Placements that
matured in April 2024.
During the period Scottish Hydro Electric Transmission plc
issued £0.9bn of new debt and had no debt maturities. The three
issuances of new debt were as follows:
· August 2024 - €850m (£715m) 8 year green Eurobond
maturing September 2032 with a coupon of 3.375% and an all-in GBP
cost of 4.9127% once swapped back to Sterling;
· June
2024 - 1.5bn NOK (£111m) 10 year private placement maturing June
2034 with a coupon of 4.731% and an all-in GBP cost of 5.3315% once
swapped back to Sterling; and
· July
2024 - £30m 15 year private placement maturing July 2039 with a
coupon of 5.591%.
13. Sources of
finance (continued)
The
Group capital comprises:
|
March
2024
|
|
September
2024
|
September
2023
(restated*)
|
|
£m
|
|
£m
|
£m
|
|
8,726.2
|
Total borrowings (excluding
lease obligations)
|
9,178.2
|
8,558.6
|
|
(1,035.9)
|
Less:
Cash and cash equivalents
|
(890.8)
|
(902.4)
|
|
7,690.3
|
Net
debt (excluding hybrid equity)
|
8,287.4
|
7,656.2
|
|
1,882.4
|
Hybrid equity
|
1,882.4
|
1,882.4
|
|
(490.2)
|
External net debt attributable to non-controlling
interests
|
(586.2)
|
(454.2)
|
|
353.2
|
Cash
held/(posted) as collateral and other short-term loans
|
260.2
|
(140.6)
|
|
9,435.7
|
Adjusted net debt and hybrid
capital
|
9,843.8
|
8,943.8
|
|
9,170.8
|
Equity attributable to shareholders of the parent
|
9,406.9
|
8,152.3
|
|
18,606.5
|
Total capital excluding
lease obligations
|
19,250.7
|
17,096.1
|
*The
comparative information has been restated. See note
2(v).
13.2 Loans and other
borrowings
|
March
2024
|
|
September
2024
|
September 2023
|
|
£m
|
|
£m
|
£m
|
|
|
Current
|
|
|
|
1,044.5
|
Short
term loans
|
1,829.0
|
1,313.3
|
|
83.5
|
Lease
obligations
|
74.9
|
81.6
|
|
1,128.0
|
|
1,903.9
|
1,394.9
|
|
|
Non-current
|
|
|
|
7,681.7
|
Loans
|
7,349.2
|
7,245.3
|
|
324.0
|
Lease
obligations
|
326.5
|
312.8
|
|
8,005.7
|
|
7,675.7
|
7,558.1
|
|
|
|
|
|
|
9,133.7
|
Total loans and
borrowings
|
9,579.6
|
8,953.0
|
|
(1,035.9)
|
Cash
and cash equivalents
|
(890.8)
|
(902.4)
|
|
8,097.8
|
Unadjusted net
debt
|
8,688.8
|
8,050.6
|
|
|
Add/(less):
|
|
|
|
1,882.4
|
Hybrid equity (note 14)
|
1,882.4
|
1,882.4
|
|
(490.2)
|
External net debt attributable to non-controlling
interests
|
(586.2)
|
(454.2)
|
|
(407.5)
|
Lease
obligations
|
(401.4)
|
(394.4)
|
|
353.2
|
Cash
held/(posted) as collateral and other short term loans
|
260.2
|
(140.6)
|
|
9,435.7
|
Adjusted net debt and hybrid
capital
|
9,843.8
|
8,943.8
|
SSE's
adjusted net debt and hybrid capital was £9.8bn at 30 September
2024, compared with £9.4bn at 31 March 2024 and £8.9bn at 30
September 2023.
Adjusted net debt and hybrid capital is stated after removing
lease obligations, external net debt attributed to non-controlling
interests and cash held and posted as collateral in line with the
Group's presentation basis which is explained at note 2(i). Cash
held and posted as collateral refers to amounts received and
deposited on commodity trading exchanges which are reported within
'Trade and other payables' and 'Trade and other receivables' on the
face of the balance sheet.
13.3 Reconciliation of net
increase in cash and cash equivalents to movement in adjusted net
debt and hybrid capital
|
March
2024
|
|
September
2024
|
September 2023
|
|
£m
|
|
£m
|
£m
|
|
144.1
|
Increase/(decrease) in cash and cash equivalents
|
(145.1)
|
10.6
|
|
|
Add/(less)
|
|
|
|
(1,982.2)
|
New
borrowing proceeds
|
(1,655.6)
|
(1,751.0)
|
|
1,744.0
|
Repayment of borrowings
|
1,047.0
|
1,738.8
|
|
166.0
|
Non-cash movement on borrowings
|
156.6
|
107.6
|
|
56.0
|
Increase in external net debt attributable to non-controlling
interests
|
96.0
|
20.0
|
|
(669.5)
|
(Decrease)/increase in cash held/posted as collateral and
other short term loans
|
93.0
|
(175.7)
|
|
(541.6)
|
Increase in adjusted net
debt and hybrid capital
|
(408.1)
|
(49.7)
|
13.4 Equity attributable to
non-controlling interests
This
relates to equity attributable to non-wholly owned but controlled
subsidiaries which are consolidated within the condensed Interim
Financial Statements of the Group. At 30 September 2024 the amount
attributable to non-controlling interests is £781.3m (2023:
£703.4m; March 2024: £749.9m), which relates to SHET of £742.8m
(2023: £660.8m; March 2024: £709.1m) and SSE Pacifico £38.5m (2023:
£42.6m; March 2024 £40.8m). The profit and loss attributable to
non-controlling interests for the period ended 30 September 2024 is
£36.8m profit (2023: £51.2m; March 2024: £100.8m), which relates to
SHET £36.9m profit (2023: £51.7m profit, March 2024: £101.5m) and
SSE Pacifico £0.1m loss (2023: £0.5m loss; March 2024: £0.7m
loss).
14. Hybrid
Equity
|
March
2024
|
|
September
2024
|
September 2023
|
|
£m
|
Perpetual subordinated
capital securities
|
£m
|
£m
|
|
598.0
|
GBP
600m 3.74% perpetual subordinated capital securities (i)
|
598.0
|
598.0
|
|
453.0
|
EUR
500m 3.125% perpetual subordinated capital securities
(i)
|
453.0
|
453.0
|
|
831.4
|
EUR
1,000m 4.00% perpetual subordinated capital securities
(ii)
|
831.4
|
831.4
|
|
1,882.4
|
|
1,882.4
|
1,882.4
|
(i)
2 July 2020 £600m and €500m Hybrid Capital Bonds
The
hybrid capital bonds issued in July 2020 have no fixed redemption
date, but the Company may, at its sole discretion, redeem all but
not part of the capital securities at their principal amount. The
date for the first potential discretionary redemption of the £600m
hybrid bond is 14 April 2026 and then every 5 years thereafter. The
date for the first potential discretionary redemption of the €500m
hybrid capital bond is 14 July 2027 and then every 5 years
thereafter. For the £600m hybrid the discretionary coupon payments
are made annually on 14 April and for the €500m hybrid the
discretionary coupon payments are made annually on 14
July.
(ii) 12
April 2022 €1,000m Hybrid Capital Bonds
The
hybrid capital bond issued in April 2022 has no fixed redemption
date, but the Company may, at its sole discretion, redeem all but
not part of the capital securities at their principal amount. The
date for the first potential discretionary redemption is 21 April
2028 and then every 5 years thereafter. The discretionary hybrid
coupon payments are made annually on 21 April.
Coupon
Payments
In
relation to the £600m hybrid equity bond a discretionary coupon
payment of £22.4m (March 2024: £22.4m) was made on 14 April 2024,
for the €500m hybrid equity bond a discretionary coupon payment of
£16.5m (March 2024: £16.5m) was made on 14 July 2024 and for the
€1bn hybrid equity bond a discretionary payment of £34.8m was paid
on 21 April 2024 (March 2024: £34.2m).
The
coupon payments in the six month period to 30 September 2024
consequently totalled £73.7m (2023: £73.1m) and the Company has the
option to defer coupon payments on the bonds on any relevant
payment date, as long as a dividend on the ordinary shares has not
been declared. Deferred coupons shall be satisfied only on
redemption; or on a dividend payment on ordinary shares, both of
which occur at the sole option of the Company. Interest will accrue
on any deferred coupon.
15. Share
capital
|
|
Number
(millions)
|
£m
|
|
Allotted, called up and fully paid:
|
|
|
|
At 1
April 2024
|
1,096.2
|
548.1
|
|
Issue
of shares
|
12.2
|
6.1
|
|
At 30 September
2024
|
1,108.4
|
554.2
|
The
Company has one class of ordinary share which carries no right to
fixed income. The holders of ordinary shares are entitled to
receive dividends as declared and are entitled to one vote per
share at meetings of the Company.
Shareholders were able to elect to receive ordinary shares in
place of the final dividend for the year to 31 March 2024 of 40.0p
per ordinary share (2023: 67.7p in relation to the final dividend
for the year to 31 March 2023; March 2024: 20.0p in relation to the
interim dividend for the year to 31 March 2024) under the terms of
the Company's scrip dividend scheme. This resulted in the issue of
12,203,570 (2023: 1,779,529; March 2024: 1,779,529 and 493,654) new
fully paid ordinary shares.
In
addition, the Company issued 53k shares (2023: 40k, March 2024:
0.8m) during the period under the savings-related share option
schemes and discretionary share option schemes (all of which were
settled by shares held in Treasury) for a consideration of £0.7m
(2023: £0.4m, March 2024: £9.2m).
On 29
August 2024 the Group entered into an irrevocable non-discretionary
share buyback programme of up to a maximum of £75.0m in own shares
to be held as treasury shares pending their cancellation or
re-issue in due course. As the share buyback was irrevocable the
full value was recognised as a liability at 30 September 2024. The
share repurchase scheme commenced on 30 September 2024, with 227k
of shares repurchased in the period for a total consideration of
£4.3m (including stamp duty and commission). SSE completed the
share buyback process on 16 October 2024. There were no share
buybacks in the financial year ended 31 March 2024.
Of
the 1,108.4m (2023: 1,095.7m, March 2024: 1,096.2m) shares in
issue, 3.0m (2023: 3.6m, March 2024: 2.8m) are held as treasury
shares. These shares will be held by the Group and used to award
shares to employees under the Sharesave schemes in the
UK.
During the period, on behalf of the Company, the employee
share trust purchased 0.1m shares (2023: 1.2m, March 2024: 1.3m)
for a consideration of £2.2m (2023: £19.7m, March 2024: £21.8m) to
be held in trust for the benefit of employee share
schemes.
16. Financial
risk management
The
Board has overall responsibility for the establishment and
oversight of the Group's risk management framework. The Group's
policies for risk management are established to identify the risks
faced by the Group, to set appropriate risk limits and controls,
and to monitor risks and adherence to limits. Exposure to
commodity, currency and interest rate risks arise in the normal
course of the Group's business and derivative financial instruments
are entered into to hedge exposure to these risks.
SSE
has a Group wide Risk Committee reporting to the Group Executive
Committee, which is responsible for reviewing the strategic,
market, credit, operational and liquidity risks and exposures that
arise from the Group's operating activities. In addition, the Group
has two dedicated Energy Market risk committees reporting to the
Group Executive Committee and Board respectively, with the Group
Executive Sub-committee chaired by the Group Chief Operating
Officer (the "Group Energy Markets Exposures Risk Committee") and
the Board Sub-committee chaired by Non-Executive Director Tony
Cocker (the "Energy Markets Risk Committee (EMRC)"). These
Committees oversee the Group's management of its energy market
exposures, including its approach to hedging.
During the period ended 30 September 2024, the Group
continued to be exposed to the economic conditions impacting the
primary commodities to which it is exposed (Gas, Carbon and Power).
The Group's approach to hedging, and the diversity of its energy
portfolios (across Wind, Hydro, Thermal and Customers) has provided
significant certain mitigation of these exposures.
The
Group's policy in relation to liquidity risk continues to be to
ensure, in so far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to its reputation. Further detail is noted in the
Group's financial statements at 31 March 2024.
For
financial reporting purposes, the Group has classified derivative
financial instruments into two categories, operating derivatives
and financing derivatives. Operating derivatives relate to all
qualifying commodity contracts including those for electricity,
gas, oil, coal and carbon and the post-day 1 fair value movements
on non-government backed contracts for difference in SSE
Renewables. Financing derivatives include all fair value and cash
flow interest rate hedges, non-hedge accounted (mark-to-market)
interest rate derivatives, cash flow foreign exchange hedges and
non-hedge accounted foreign exchange contracts. Non-hedge accounted
contracts are treated as held for trading.
The
net movement reflected in the interim income statement can be
summarised as follows:
|
Year
ended 31 March 2024
£m
|
|
Six months ended 30
September 2024
£m
|
Six
months ended 30 September 2023 (restated*)
£m
|
|
|
Operating
derivatives
|
|
|
|
(573.1)
|
Total
result on operating derivatives (i)
|
51.6
|
(434.5)
|
|
1,025.3
|
Less:
amounts settled (ii)
|
67.1
|
499.4
|
|
452.2
|
Movement in unrealised
derivatives
|
118.7
|
64.9
|
|
|
|
|
|
|
|
Financing derivatives (and
hedged items)
|
|
|
|
370.6
|
Total
result on financing derivatives (i)
|
59.2
|
211.9
|
|
(364.5)
|
Less:
amounts settled (ii)
|
(63.8)
|
(170.9)
|
|
6.1
|
Movement in
unrealised derivatives
|
(4.6)
|
41.0
|
|
|
|
|
|
|
|
Financial guarantee
liabilities
|
|
|
|
12.5
|
Total
result on financial guarantee liabilities (iii)
|
0.9
|
(34.2)
|
|
470.8
|
Net income statement
impact
|
115.0
|
71.7
|
(i)
Total result on derivatives in the income statement represents the
total amounts (charged) or credited to the income statement in
respect of operating and financial derivatives.
(ii)
Amounts settled in the period represent the result on derivatives
transacted which have matured or been delivered and have been
included within the total result on derivatives.
(iii)
Total result on financial guarantee liabilities in the income
statement represents the total amounts credited or (charged) to the
income statement in respect of the unwind of the financial
liabilities and new or expiring contracts.
*The
comparative information has been restated. See note
2(v).
The
movement in unrealised operating derivatives excludes a £3.6m loss
(2023: £13.7m loss; March 2024: £8.8m loss) on proprietary trades,
which has been recognised in the underlying profit of the
Group.
16. Financial
risk management (continued)
The
fair values of the primary financial assets and liabilities of the
Group together with their carrying values are as
follows:
|
March
2024
|
|
September
2024
|
September 2023 (restated*)
|
|
Carrying
value
£m
|
Fair
value
£m
|
|
Carrying
value
£m
|
Fair
value
£m
|
Carrying
value
£m
|
Fair
value
£m
|
|
|
|
Financial
Assets
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
1,305.5
|
1,305.5
|
Trade
receivables
|
1,173.7
|
1,173.7
|
1,096.7
|
1,096.7
|
|
4.1
|
4.1
|
Other
receivables
|
4.2
|
4.2
|
11.1
|
11.1
|
|
9.3
|
9.3
|
Cash
collateral and other short term loans
|
4.4
|
4.4
|
140.6
|
140.6
|
|
1,035.9
|
1,035.9
|
Cash
and cash equivalents
|
890.8
|
890.8
|
902.4
|
902.4
|
|
536.1
|
536.1
|
Derivative financial assets
|
420.8
|
420.8
|
262.6
|
262.6
|
|
2,890.9
|
2,890.9
|
|
2,493.9
|
2,493.9
|
2,413.4
|
2,413.4
|
|
|
|
Non-current
|
|
|
|
|
|
3.2
|
3.2
|
Unquoted equity investments
|
7.6
|
7.6
|
2.9
|
2.9
|
|
170.1
|
170.1
|
Loan
note receivable
|
181.6
|
181.6
|
159.5
|
159.5
|
|
1,352.9
|
1,352.9
|
Loans
to associates and jointly controlled entities
|
1,484.4
|
1,484.4
|
1,196.8
|
1,196.8
|
|
64.2
|
64.2
|
Derivative financial assets
|
63.2
|
63.2
|
139.9
|
139.9
|
|
1,590.4
|
1,590.4
|
|
1,736.8
|
1,736.8
|
1,499.1
|
1,499.1
|
|
4,481.3
|
4,481.3
|
|
4,230.7
|
4,230.7
|
3,912.5
|
3,912.5
|
|
|
|
Financial
Liabilities
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
(656.7)
|
(656.7)
|
Trade
payables
|
(569.4)
|
(569.4)
|
(622.5)
|
(622.5)
|
|
(362.5)
|
(362.5)
|
Outstanding liquid funds
|
(264.6)
|
(264.6)
|
-
|
-
|
|
(1,044.5)
|
(1,113.6)
|
Loans
and borrowings
|
(1,829.0)
|
(1,831.1)
|
(1,313.3)
|
(1,392.4)
|
|
(83.5)
|
(83.5)
|
Lease
liabilities
|
(74.9)
|
(74.9)
|
(81.6)
|
(81.6)
|
|
(3.1)
|
(3.1)
|
Financial guarantee liabilities
|
(2.9)
|
(2.9)
|
(47.0)
|
(47.0)
|
|
(345.2)
|
(345.2)
|
Derivative financial liabilities
|
(250.9)
|
(250.9)
|
(505.2)
|
(505.2)
|
|
(2,495.5)
|
(2,564.6)
|
|
(2,991.7)
|
(2,993.8)
|
(2,569.6)
|
(2,648.7)
|
|
|
|
Non-current
|
|
|
|
|
|
(7,681.7)
|
(7,440.6)
|
Loans
and borrowings
|
(7,349.2)
|
(7,295.8)
|
(7,245.3)
|
(6,412.5)
|
|
(324.0)
|
(324.0)
|
Lease
liabilities
|
(326.5)
|
(326.5)
|
(312.8)
|
(312.8)
|
|
(36.4)
|
(36.4)
|
Financial guarantee liabilities
|
(35.0)
|
(35.0)
|
(34.5)
|
(34.5)
|
|
(222.2)
|
(222.2)
|
Derivative financial liabilities
|
(208.8)
|
(208.8)
|
(141.7)
|
(141.7)
|
|
(8,264.3)
|
(8,023.2)
|
|
(7,919.5)
|
(7,866.1)
|
(7,734.3)
|
(6,901.5)
|
|
(10,759.8)
|
(10,587.8)
|
|
(10,911.2)
|
(10,859.9)
|
(10,303.9)
|
(9,550.2)
|
|
|
|
|
|
|
|
|
|
(6,278.5)
|
(6,106.5)
|
Net financial
liabilities
|
(6,680.5)
|
(6,629.2)
|
(6,391.4)
|
(5,637.7)
|
*The
comparative information has been restated. See note
2(v).
Fair value
hierarchy
The
following tables provide an analysis of financial instruments that
are measured subsequent to initial recognition at fair value,
grouped into Levels 1 to 3 based on the degree to which the fair
value is observable.
· Level
1 fair value measurements are those derived from unadjusted quoted
market prices for identical assets or liabilities.
· Level
2 fair value measurements are those derived from inputs other than
quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
· Level
3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data.
|
|
September
2024
|
September 2023 (restated*)
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Financial
assets
|
|
|
|
|
|
|
|
|
|
Energy derivatives
|
298.8
|
121.0
|
6.2
|
426.0
|
-
|
224.8
|
7.5
|
232.3
|
|
Interest rate derivatives
|
-
|
46.0
|
-
|
46.0
|
-
|
155.1
|
-
|
155.1
|
|
Foreign exchange derivatives
|
-
|
12.0
|
-
|
12.0
|
-
|
15.1
|
-
|
15.1
|
|
Unquoted equity instruments
|
-
|
-
|
7.6
|
7.6
|
-
|
-
|
2.9
|
2.9
|
|
|
298.8
|
179.0
|
13.8
|
491.6
|
-
|
395.0
|
10.4
|
405.4
|
|
Financial
liabilities
|
|
|
|
|
|
|
|
|
|
Energy derivatives
|
-
|
(202.6)
|
(53.5)
|
(256.1)
|
(37.3)
|
(507.1)
|
(24.3)
|
(568.7)
|
|
Interest rate derivatives
|
-
|
(158.6)
|
-
|
(158.6)
|
-
|
(60.7)
|
-
|
(60.7)
|
|
Foreign exchange derivatives
|
-
|
(45.0)
|
-
|
(45.0)
|
-
|
(17.5)
|
-
|
(17.5)
|
|
Loans
and borrowings*
|
-
|
113.1
|
-
|
113.1
|
-
|
(37.1)
|
-
|
(37.1)
|
|
|
-
|
(293.1)
|
(53.5)
|
(346.6)
|
(37.3)
|
(622.4)
|
(24.3)
|
(684.0)
|
* The
£113.1m relates to fair value hedges that are in place against the
Group's loans and borrowings and has been included in the table
above within financial liabilities, as it is presented in loans and
borrowings liabilities in the balance sheet.
16.
Financial risk management (continued)
|
|
March
2024
|
|
|
Level
1
|
Level
2
|
Level
3
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
|
Financial
assets
|
|
|
|
|
|
Energy derivatives
|
357.7
|
121.6
|
0.5
|
479.8
|
|
Interest rate derivatives
|
-
|
113.0
|
-
|
113.0
|
|
Foreign exchange derivatives
|
-
|
7.5
|
-
|
7.5
|
|
Unquoted equity instruments
|
-
|
-
|
3.2
|
3.2
|
|
|
357.7
|
242.1
|
3.7
|
603.5
|
|
Financial
liabilities
|
|
|
|
|
|
Energy derivatives
|
-
|
(327.1)
|
(101.3)
|
(428.4)
|
|
Interest rate derivatives
|
-
|
(95.8)
|
-
|
(95.8)
|
|
Foreign exchange derivatives
|
-
|
(43.2)
|
-
|
(43.2)
|
|
Loans
and borrowings
|
-
|
(0.9)
|
-
|
(0.9)
|
|
|
-
|
(467.0)
|
(101.3)
|
(568.3)
|
*The
comparative information has been restated. See note
2(v).
There
were no significant transfers out of Level 1 into Level 2 and out
of Level 2 into Level 1 during the 6 months ended 30 September 2024
(2023: none, March 2024: none). There were no significant transfers
out of Level 2 into Level 3 and out of Level 3 into Level 2 during
the 6 months ended 30 September 2024 (2023: none, March 2024:
none).
The
following table represents the difference between the Level 3
financial instruments at fair value at the start of the reporting
period and at the reporting date:
|
31
March 2024
£m
|
|
30 September
2024
£m
|
30
September 2023
(restated*)
£m
|
|
|
|
|
|
|
25.6
|
Level
3 financial instruments fair value at 1 April
|
(97.6)
|
25.6
|
|
(24.1)
|
Transfer (from)/to financial assets
|
4.6
|
(24.1)
|
|
(0.4)
|
Cash
settlement
|
1.8
|
-
|
|
(0.4)
|
Disposals in period
|
(0.2)
|
-
|
|
(106.0)
|
Remeasurement (loss)/gain recognise in income
statement
|
36.9
|
(15.0)
|
|
0.3
|
Remeasurement gain/(loss) recognised in other comprehensive
income
|
-
|
(0.4)
|
|
11.5
|
Additions - new instruments entered in the period
|
3.0
|
-
|
|
(11.5)
|
Deferred day 1 gains on instruments entered in the
period
|
(3.0)
|
-
|
|
7.4
|
Amortisation of day 1 gains in the period
|
14.8
|
-
|
|
(97.6)
|
Level 3 financial
instruments fair value
|
(39.7)
|
(13.9)
|
*The
comparative information has been restated. See note
2(v).
17. Retirement
benefit obligations
The
Group has two funded final salary pension schemes which provide
defined benefits based on final pensionable pay. The schemes are
subject to independent valuations at least every three years. The
Group provides pension benefits to most UK colleagues through SSE
Pensions+, a defined contribution master trust agreement with
Aviva. The Group also operates other pension arrangements,
including a defined contribution master trust agreement with Zurich
in the Republic of Ireland and an Unfunded Unapproved Retirement
Benefit Scheme. Further details on these schemes are provided in
the Group's Financial Statements to 31 March 2024.
Summary of Defined Benefit
Pension Schemes:
|
Movement recognised in the SoCI
|
Pension assets
|
|
Movement recognised in
respect of the pension asset in the SoCI
|
Pension
asset
|
|
March
2024
|
March
2024
|
|
September
2024
|
September
2023
|
September
2024
|
September
2023
|
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
£m
|
|
(37.1)
|
339.3
|
Scottish Hydro Electric
|
15.6
|
(47.7)
|
360.3
|
324.2
|
|
(118.1)
|
82.3
|
SSE
Southern
|
17.9
|
(102.1)
|
110.5
|
86.8
|
|
(155.2)
|
421.6
|
|
33.5
|
(149.8)
|
470.8
|
411.0
|
The
last triennial actuarial valuation of the Scottish Hydro Electric
Pension Scheme was carried out as at 31 March 2024 and showed a
surplus of £229.3m on a projected unit basis. Following this
valuation, the Group agreed a new schedule of contributions which
does not require contributions to be paid to the scheme, unless
there is a sustained deficit for two successive quarters on the
Trustees' long-term funding basis. Consequently, the Group has not
and is not expected to make contributions to the scheme in the year
ending 31 March 2025.
The
last triennial actuarial valuation of the SSE Southern Group of the
Electricity Supply Pension Scheme as at 31 March 2022 showed a
deficit of £79.6m on a projected unit basis. Following this
valuation, the Group agreed to a new schedule of contributions
which, along with investment returns from return-seeking assets,
are expected to make good this shortfall by 31 March 2027. The
Group also pays contributions in respect of current accrual. Total
contributions of approximately £28.2m are expected to be paid by
the Group during the year ending on 31 March 2025, including
deficit repair contributions of £15.5m of which £7.7m have been
paid to 30 September 2024. The deficit repair contribution will be
made annually until March 2027, increasing in line with inflation
each year.
17. Retirement
benefit obligations (continued)
A
summary of the movement presented in the statement of comprehensive
income is shown below:
|
Year
ended 31 March 2024
£m
|
|
Six months ended 30
September
2024
£m
|
Six
months ended 30 September
2023
£m
|
|
(155.2)
|
Actuarial (losses)/gains recognised
|
33.5
|
(149.8)
|
|
38.8
|
Deferred tax thereon
|
(8.4)
|
37.5
|
|
(116.4)
|
Net (loss)/gain recognised
in statement of comprehensive income
|
25.1
|
(112.3)
|
The
major assumptions used by the actuaries in both schemes in
preparing the IAS 19 valuations were:
|
March 2024
|
|
September
2024
|
September 2023
|
|
3.4%
|
Rate
of increase in pensionable salaries
|
3.3%
|
3.5%
|
|
|
3.1%
|
Rate
of increase in pension payments
|
3.1%
|
3.2%
|
|
|
4.8%
|
Discount rate
|
5.1%
|
5.5%
|
|
|
3.1%
|
Inflation rate
|
3.1%
|
3.2%
|
|
The
assumptions relating to longevity underlying the pension
liabilities are based on standard actuarial mortality tables, and
include an allowance for future improvements in longevity. The
assumptions, equivalent to future longevity for members in normal
health at age 65, are as follows:
|
March
2024
|
|
September
2024
|
September 2023
|
|
Male
|
Female
|
|
Male
|
Female
|
Male
|
Female
|
|
|
|
|
Scottish Hydro Electric
Pension Scheme
|
|
|
|
|
|
|
22
|
24
|
Currently aged 65
|
22
|
24
|
22
|
24
|
|
|
24
|
26
|
Currently aged 45
|
24
|
26
|
24
|
26
|
|
|
|
|
SSE Southern Pension
Scheme
|
|
|
|
|
|
|
22
|
25
|
Currently aged 65
|
22
|
25
|
22
|
25
|
|
|
24
|
26
|
Currently aged 45
|
24
|
26
|
24
|
26
|
|
Other
matters
On 16
June 2023 the High Court issued a ruling in respect of Virgin Media
v NTL Pension Trustees II Limited (and others) calling into
question the validity of rule amendments made to defined benefit
pension schemes contracted-out on a Reference Scheme Test basis
between 6 April 1997 and 5 April 2016. Amendments to these pension
schemes over this time required confirmation from the Scheme
Actuary that the Reference Scheme Test would continue to be met. In
the absence of such a confirmation, the Rule amendment would be
void. This ruling could have wide ranging implications for
many UK pension schemes. In July 2024 the Court of Appeal
upheld the judgement.
At 30
September 2024, the Trustees of the Scottish Hydro Electric Pension
Scheme and the Trustees of the SSE Southern Pension Scheme have not
performed a detailed assessment over the potential impact of this
ruling and are considering the implications of the ruling on the
schemes. The defined benefit obligation for the Group's
schemes has been calculated on the basis of the pension benefits
currently being administered. Any subsequent developments
following the Court of Appeal's judgement will be
monitored.
18. Capital
commitments
|
March 2024
£m
|
|
September
2024
£m
|
September 2023
£m
|
|
1,389.2
|
Capital expenditure
Contracted for but not provided
|
3,605.4
|
1,190.0
|
The
increase from the prior year relates primarily to Transmission
projects.
19. Related
party transactions
The
following transactions took place during the period between the
Group and entities which are related to the Group, but which are
not members of the Group. Related parties are defined as those in
which the Group has control, joint control or significant influence
over.
|
|
September
2024
|
September 2023
|
|
|
Sale of goods and
services
|
Purchase of goods and
services
|
Amounts owed
from
|
Amounts owed
to
|
Sale
of goods and services
|
Purchase of goods and services
|
Amounts owed from
|
Amounts owed to
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Joint
arrangements:
|
|
|
|
|
|
|
|
|
|
Marchwood Power Limited
|
51.2
|
(74.9)
|
-
|
(8.9)
|
0.4
|
(17.4)
|
-
|
(17.7)
|
|
Clyde
Windfarm (Scotland) Limited
|
2.7
|
(68.1)
|
-
|
(42.7)
|
2.8
|
(53.9)
|
-
|
(32.2)
|
|
Beatrice Offshore Windfarm Limited
|
2.9
|
(28.1)
|
1.3
|
(4.2)
|
2.6
|
(30.9)
|
2.7
|
(7.4)
|
|
Stronelairg Wind Farm Limited
|
1.3
|
(28.4)
|
1.3
|
(13.5)
|
1.3
|
(29.2)
|
-
|
(17.2)
|
|
Dunmaglass Wind Farm Limited
|
0.6
|
(11.6)
|
0.6
|
(5.6)
|
0.6
|
(13.2)
|
-
|
(7.4)
|
|
Neos
Networks Limited
|
1.0
|
(12.4)
|
2.0
|
(3.8)
|
1.8
|
(14.6)
|
2.3
|
(3.9)
|
|
Seagreen Wind Energy Limited
|
4.4
|
(59.6)
|
18.4
|
(9.0)
|
14.3
|
(30.5)
|
10.3
|
(10.2)
|
|
Doggerbank A, B, C and D
|
17.0
|
-
|
18.5
|
-
|
17.2
|
-
|
13.0
|
-
|
|
Other
joint arrangements
|
8.2
|
(74.8)
|
3.4
|
(43.4)
|
8.2
|
(64.5)
|
3.0
|
(45.0)
|
19. Related
party transactions (continued)
|
|
March
2024
|
|
|
Sale
of goods and services
|
Purchase of goods and services
|
Amounts owed from
|
Amounts owed to
|
|
|
£m
|
£m
|
£m
|
£m
|
|
Joint
arrangements:
|
|
|
|
|
|
Marchwood Power Limited
|
42.6
|
(63.2)
|
-
|
(13.0)
|
|
Clyde
Windfarm (Scotland) Limited
|
5.6
|
(153.9)
|
-
|
(48.7)
|
|
Beatrice Offshore Windfarm Limited
|
4.8
|
(75.5)
|
2.0
|
(6.8)
|
|
Stronelairg Wind Farm Limited
|
2.5
|
(75.6)
|
-
|
(20.8)
|
|
Dunmaglass Wind Farm Limited
|
1.1
|
(32.2)
|
-
|
(8.6)
|
|
Neos
Networks Limited
|
3.8
|
(28.5)
|
6.1
|
(4.7)
|
|
Seagreen Wind Energy Limited
|
19.8
|
(113.4)
|
11.3
|
(11.7)
|
|
Doggerbank A, B, C and D
|
36.5
|
-
|
10.7
|
-
|
|
Other
joint arrangements
|
18.0
|
(209.4)
|
6.7
|
(63.9)
|
The
transactions with Marchwood Power Limited relate to the contracts
for the provision of energy or the tolling of energy under power
purchase arrangements.
The
amounts outstanding are trading balances, are unsecured and will be
settled in cash.
In
addition to the above at 30 September 2024, the Group was owed the
following loans from its principal joint ventures: Marchwood Power
Limited £7.7m (2023: £19.0m, March 2024: £12.2m); Clyde Windfarm
(Scotland) Limited £127.1m (2023: £127.1m, March 2024: £127.1m);
Dunmaglass Wind Farm Limited £46.6m (2023: £46.5m, March 2024:
£46.6m); Stronelairg Wind Farm Limited £88.7m (2023: £88.7m, March
2024: £88.7m); Neos Networks Limited £71.8m (2023: £103.1m, March
2024: £57.7m); Seagreen Wind Energy Limited £691.3m (2023: £611.4m,
March 2024: £686.4m); SSE Slough Multifuel Limited £179.0m (2023:
£143.9m, March 2024: £157.8m) and Doggerbank Offshore Wind Farm Project 1 Holdco Limited
£158.5m (2023: £nil, March 2024:
£87.7m).
20. Seasonality
of operations
Certain activities of the Group are affected by weather and
temperature conditions and seasonal market price fluctuations. As a
result of this, the amounts reported for the interim period may not
be indicative of the amounts that will be reported for the full
year due to seasonal fluctuations in customer demand for gas,
electricity and services, the impact of weather on demand,
renewable generation output and commodity prices and market changes
in commodity prices. In Transmission and Distribution, the volumes
of electricity and gas distributed or transmitted across network
assets are dependent on levels of customer demand which are
generally higher in winter months. In SSE Business Energy and SSE
Airtricity, notable seasonal effects include the impact on customer
demand of warmer temperatures in the first half of the financial
year and the procurement prices in summer versus winter. In Thermal
Generation and Renewables, there is the impact of lower Renewables
production in the summer as well as the related impact on commodity
prices. The weather impact on Renewable generation production in
relation to hydro and wind assets is particularly affected by
seasonal fluctuation. The impact of temperature on customer demand
for gas is more volatile than the equivalent demand for
electricity. The Gas Storage business' activity is partly to manage
seasonal risk across summer/winter gas price spreads and its
profitability is impacted by the extent to which optimisation gains
or losses can be achieved.
Principal risks and Uncertainties
SSE's
established Risk Management Framework and wider system of internal
control continues to inform strategic decision-making in 2024/25.
This, combined with a resilient business model, helps the Group
manage and minimise the human, operational and financial impacts
from external conditions such as commodity prices and to meet its
objective of supporting the reliable supply of electricity to those
who needed it.
The
Directors regularly monitor the Principal Risks and Uncertainties
of the Group and have determined that those reported in the 2024
Annual Report and summarised below remain relevant for the
remaining half of the financial year.
· Climate Change
· Cyber
Security and Resilience
· Energy Affordability **
· Energy Infrastructure Failure
· Financial Liabilities
· Large
Capital Projects Management
· People and Culture
· Political and Regulatory Change **
· Portfolio Exposure
· Safety and the Environment *
· Speed
of Change
· Supply Chain
* Safety remains SSE's most important value, and management of
this risk remains SSE's highest priority.
* It
should be noted that Energy Affordability is particularly closely
linked to - and therefore impacted by - Political and Regulatory
Change and Portfolio Exposure.
An
essential tenet of SSE's Risk Management process is the
consideration of potential emerging risks and whether any of those
identified have the potential to become a Group Principal risk in
the medium to long term. As such, the number of Principal
Risks increased to 12 for the 2024 year end, with the inclusion of
the newly formed "Supply Chain" risk as disclosed in the SSE plc
2024 Annual Report. For more information on these risks, and
the wider system of internal control, please refer to pages 90 to
95 of the SSE plc 2024 Annual Report which is available on the
company website www.sse.com.
Statement of directors' responsibilities in respect of the
condensed interim financial statements
We
confirm that to the best of our knowledge:
i)
the condensed set of financial statements has been prepared in
accordance with UK adopted IAS 34 Interim Financial
Reporting;
ii)
the interim management report includes a fair review of the
information required by:
(a)
DTR 4.2.7R of the Disclosure
Guidance and Transparency Rules, being an indication of
important events that have occurred during the first six months of
the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year;
(b)
DTR 4.2.8R of the Disclosure
Guidance and Transparency Rules, being related party
transactions that have taken place in the first six months of the
current financial year that have materially affected the financial
position or performance of the entity during that period; and any
changes in the related party transactions described in the last
Annual Report that could do so; and
(c)
DTR 4.2.10 of the Disclosure
Guidance and Transparency Rules, being the condensed set of
financial statements, which has been prepared in accordance with
the applicable set of accounting standards, gives a true and fair
view of the assets, liabilities, financial position and profit or
loss of the issuer, or the undertakings included in the
consolidation as a whole.
For
and on behalf of the Board
Alistair
Phillips-Davies
Barry O'Regan
Chief
Executive
Chief Financial Officer
Perth
12
November 2024
Independent review report to SSE plc
Conclusion
We
have been engaged by the Company to review the condensed set of
financial statements in the half-yearly financial report for the
six months ended 30 September 2024 which comprises Consolidated
Income Statement, Consolidated Statement of Other Comprehensive
Income, Consolidated Balance Sheet, Consolidated Statement of
Changes in Equity, Consolidated Cash Flow Statement and the related
explanatory notes 1 to 20. We have read the other information
contained in the half yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
Based
on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 September
2024 is not prepared, in all material respects, in accordance with
UK adopted International Accounting Standard 34 and the Disclosure
Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
Basis for
Conclusion
We
conducted our review in accordance with International Standard on
Review Engagements 2410 (UK) "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity"
(ISRE) issued by the Financial Reporting Council. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit
opinion.
As
disclosed in note 1, the annual financial statements of the group
are prepared in accordance with UK adopted international accounting
standards. The condensed set of financial statements included in
this half-yearly financial report has been prepared in accordance
with UK adopted International Accounting Standard 34, "Interim
Financial Reporting".
Conclusions Relating to
Going Concern
Based
on our review procedures, which are less extensive than those
performed in an audit as described in the Basis of Conclusion
section of this report, nothing has come to our attention to
suggest that management have inappropriately adopted the going
concern basis of accounting or that management have identified
material uncertainties relating to going concern that are not
appropriately disclosed.
This
conclusion is based on the review procedures performed in
accordance with this ISRE, however future events or conditions may
cause the entity to cease to continue as a going
concern.
Responsibilities of the
directors
The
directors are responsible for preparing the half-yearly financial
report in accordance with the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct
Authority.
In
preparing the half-yearly financial report, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do
so.
Auditor's Responsibilities
for the review of the financial information
In
reviewing the half-yearly report, we are responsible for expressing
to the Company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our conclusion,
including our Conclusions Relating to Going Concern, are based on
procedures that are less extensive than audit procedures, as
described in the Basis for Conclusion paragraph of this
report.
Use of our
report
This
report is made solely to the company in accordance with guidance
contained in International Standard on Review Engagements 2410 (UK)
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Ernst
& Young LLP
London
12
November 2024