SSE plc has today reported Interim results for the six months ended 30 September 2020

LEADING THE WAY TO NET ZERO - delivery against strategic priorities

·    Total Recordable Injuries in the first six months of the year fell to 27, compared with 35 in the same period last year.

·    Strong operational performance, continuing to establish SSE as the pre-eminent green energy company in the UK and Ireland with strategic progress in key areas, including:

o  Making significant progress on its £7.5bn investment plan - early construction work under way and key contracts awarded at both Seagreen and Viking, with financial close on the first two phases of the world's largest offshore wind farm at Dogger Bank expected in the coming days.

o  Delivering £1.4bn of its £2 billion plus disposal programme announced in June, with gains on sale from Walney, MapleCo and Multifuel Energy expected to total over £900m.

o  Undertaking prudent financing activity, raising over £2bn in Hybrid Capital and Eurobonds, leaving the Group with no significant refinancing or funding requirements for the next two years.

·    Continued to develop an attractive pipeline of renewables projects that would see SSE treble its renewable output by 2030, with a clear aspiration to reach a run rate of at least 1GW of new assets a year during the second half of this decade.

·    Developed a clear case for investments that would, in all reasonable outcomes, see Transmission RAV exceed £5bn by the end of the RIIO-T2 price control in 2026, with opportunities for further growth beyond this.

·    Led the industry in making the case for an ambitious green economic recovery from the pandemic, in addition to building on its existing science-based carbon targets announced in June by joining the UN Global Compact's Race to Zero pledge - committing to achieving net zero for both direct and indirect emissions, by 2050 at the latest.

·    Established as a principal partner to the UK Government in the run up to and during the COP26 UN climate summit in November 2021.

·    Published a Just Transition strategy on the social implications of delivering net zero and SSE's role in supporting fairness for employees, customers and communities.

·    Continued to support the safe and reliable supply of electricity to the people and organisations who depend upon it in the fight against coronavirus.

·    Not drawn on furlough or any other government support schemes; with its investment programme creating more than 1,000 skilled jobs.

Financial results for six months ended 30 September 2020

·    Adjusted operating profit down 15% to £418.3m / reported operating profit up 183% to £985.1m.

·    Adjusted profit before tax down 26% to £193.9m / reported profit before tax up 544% to £829.5m.

·    Coronavirus impact on operating profit estimated at £115m, none of which has been treated as exceptional.

·    Adjusted earnings per share down 34% to 11.9p, within the expected 10p-12.5p range.

·    Reported earnings per share of 67.7p, versus 6.2p last year.

·    Disposal programme announced in June has delivered exceptional gains on sale of £260.8m before tax recognised during the period on disposal of Walney and MapleCo, with Multifuel Energy exceptional gain to be recognised in second half.

·    Adjusted investment and capital expenditure of £434.4m, after project finance development expenditure refunds of £246.1m.

·    Adjusted net debt and hybrid capital at £10.6bn.

*Unless otherwise stated, excludes results from discontinuing operations: SSE Energy Services sold on 15 January 2020 and Gas Production assets held for sale at 30 September 2020

Interim dividend in line with five-year dividend plan to 2023

·    Interim dividend of 24.4p per share.

·    Intention to recommend full-year dividend of 80p per share plus RPI inflation and continue to target RPI increases in the two subsequent years as set out in the 2023 dividend plan.

Financial outlook for 2020/21 and beyond

·    Adjusted earnings per share, including below impact of coronavirus and assuming normal weather conditions, estimated to be in the range of 75p to 85p including gains on disposal of stakes in Seagreen and Dogger Bank offshore wind farms.

·    Full-year coronavirus impact on operating profit expected to be towards the middle of the £150m to £250m range set out in June.

·    Disposal of Multifuel Energy for a total cash consideration of £995m, announced on 13 October 2020, expected to complete by late 2020 subject to antitrust approval by the European Commission, with an exceptional gain in excess of £650m expected to be recognised on completion.

·    Reported EPS will reflect gains on disposals for Multifuel Energy, Walney and MapleCo and is expected to be well in excess of 150p excluding any movement in remeasurements under IFRS9.

·    Adjusted net debt expected to be around £9.5bn at March 2021.

·    Continuing to target a ratio of net debt to EBITDA at the lower end of a 4.5 to 5 times range between 2021/22 and 2024/25.

·    Confirming that, with SSE's disposals programme delivering well in excess of £2bn proceeds, the £7.5bn investment plan over the five years to March 2025 is expected to be fully financeable and consistent with its net debt to EBITDA target ratio without any requirement to change capital structure.

Richard Gillingwater, Chair of SSE, said:
"The resilience of SSE's business model and the ongoing commitment of our employees are reflected in the strong operational performance we have reported for the first half of 2020/21. Challenges lie ahead - not least in navigating another wave of the pandemic, the potential operational impact of the weather in the second half and the lingering uncertainties around Brexit - but these are far outweighed by the wealth of significant opportunities we have to create value in the transition to net zero emissions.

"This will be my last set of results before I step down from the SSE Board at the end of the financial year, and, following successful efforts to reshape and refocus the Group in recent years, I am pleased to be leaving SSE on a robust strategic and financial footing and with significant opportunities for growth in the years ahead.

"Our disposals programme is on track, real progress is being made against the capex plan and we have the balance sheet strength to deliver what is an enviable low-carbon development pipeline. In all of this activity we are contributing solutions to the global problem of climate change and ultimately promoting the long-term success of the Company for the benefit of all our stakeholders."

KeyFacts Energy: SSE Renewables UK country profile