SSE shares rise on strong half-year results

Investing.com -- Shares of SSE plc (LON:SSE ) rose on Wednesday after it delivered strong half-year results, reporting adjusted EPS of 49.8p, surpassing its earlier guidance of at least 45p. 

SSE has also reaffirmed its full-year EPS target and is maintaining guidance for adjusted EPS between 175-200p by FY27.  

The energy giant remains on track with its £20 billion clean energy investment program, having spent £1.3 billion in capex so far this fiscal year. 

Net debt stands at £9.8 billion, with the company projecting capital expenditure of around £3 billion in FY25. Despite the high spending, SSE expects its net debt-to-EBITDA ratio to stay at the lower end of the 3.5-4.0x range.  

The company’s Networks division was a key driver of growth, with EBIT rising 50% to £504 million. SSEN Distribution contributed £346.3 million, a 188% surge, as inflation adjustments boosted revenues. 

Meanwhile, the Transmission segment faced a 27% drop in EBIT due to the impact of capital allowances.  

In Renewables, SSE benefited from increased operating capacity and favorable wind conditions in Scotland, which were about 14% stronger than in the previous year. This lifted EBIT by 286% to £335.6 million.  

However, the Thermal Energy segment reported an EBIT loss of £44 million, reflecting limited opportunities for flexible thermal and gas operations in a more stable market environment. 

Seasonal factors also weighed on gas storage. However, the company reiterated its full-year adjusted operating profit forecast of £200 million for these assets.  

Separately, CEO Alistair Phillips-Davies will retire in 2025. He plans to remain in his role until a successor is appointed, ensuring a smooth transition.

“The move to ensure a smooth leadership transition should be well received, whilst we expect that gas prices may be a focus of the call alongside any further details that can be provided on offshore project timings/costs,” said analysts at RBC Capital Markets in a note.

Source: Investing.com

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