SSE share price down 3% as profits plummet, Labour nationalisation threat grows
The British energy supplier saw its share price take a tumble after its profit fell by more than a third amid challenging market conditions and calls to renationalise UK energy networks by Labour leader Jeremy Corbyn.
SSE recorded a 38% decline in pre-tax profit to £725.7 million in its full-year results that helped send its share price lower on Wednesday as the company faces stiff competition and rising costs.
The company’s future is also becoming increasingly unclear as calls from the Labour Party to renationalise Britain’s energy networks grow louder.
‘While our financial results clearly fell well short of what we hoped to achieve at the start of the year, we’ve made significant progress towards our ambition to be a leading energy company in a low-carbon world,’ SSE Chairman Richard Gillingwater said.
SSE results: key figures
SSE issued a final dividend of 68.2p a share, bringing its full-year pay-out to 97.5p, in line with its five-year dividend plan.
‘The fundamental strengths of our business and the strategic opportunities afforded by the transition to a low-carbon economy will support the delivery of our five-year dividend plan and creation of value for society as a whole,’ Gillingwater said.
Adjusted EBITDA for its core businesses of electricity networks and renewables came in at over £1.5bn, representing 83% of SSE Group’s total.
Total GDP contribution to UK economy of £8.9bn and to Irish economy of €689m due to direct and supply chain activities, supporting an estimated 105,000 jobs across both countries.
SEE outlook unclear as Labour renationalisation threat grows
Despite the next general election not expected until 2022, and it unlikely that the opposing Labour party will garner enough support to control a majority in parliament, its leader Jeremy Corbyn laid out plans to renationalise British energy networks.
The news has created a high degree of uncertainty for SSE and other energy providers who are already struggling to compete with smaller, more nimble rivals and increased costs of doing business.
“We will make sure we cover all angles we need; regulatory, legal and otherwise,” Alistair Phillips-Davies told journalists on a media call.
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