SSE shares edged down after the UK power generator said its major wind farm development would be delayed by months until the summer.
SSE fell as much as 1.9% after the announcement of the delay to the Seagreen development, which is set to be the world’s largest offshore wind farm. A lull in the firm’s renewables unit from adverse weather and delays “highlight persistent headwinds in offshore development,” said Bloomberg Intelligence analyst Patricio Alvarez.
The company still posted bumper profits from ballooning energy prices just a day before the government is set to expand a windfall tax on the industry.
The UK power generator’s results only heighten the spotlight on utilities seen as capitalizing on higher wholesale prices after Russia’s invasion of Ukraine. British Chancellor Jeremy Hunt is considering a 40% windfall tax on their “excess returns” as part of a sprawling package of tariff increases and spending cuts due to be announced Thursday.
The firm reported adjusted pretax profit of £559 million in the half-year ending Sept. 30, a 221% increase from a year earlier.
Despite the company’s growing focus on green power, a large part of its profit growth was derived from its gas-fired generation. It was also hit by a drop in earnings from its renewables business, caused by lower than expected hydropower and wind volumes, forcing it to buy power at higher prices to meet its contracts.
Earnings per share were 42 pence, compared with 11 pence a year earlier. The company maintained its full-year guidance of at least £1.20.
Delays in the construction of Seagreen, which is now expected to be operational in the summer instead of April, cost the company £57 million because it needed to buy back hedged power.
SSE is still trying to sell a 25% stake in its power transmission assets to raise cash to build more renewables generation as it focuses on wind and hydropower in Scotland. The company said a sale agreement was “expected in the coming weeks.”
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