BREAKING NEWS

BREAKING NEWS

SSE cuts annual profit outlook on halted capacity market payments

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By Susanna Twidale

(Reuters) - British utility SSE Plc cut its full-year profit forecast on Friday as the suspension of payments from a back-up power scheme dented income.

A European Union court ruling last year forced Britain to halt payments under its capacity market scheme, which pays power generators to be available in times of high demand. The government says it expects to make retrospective payments.

"SSE's working assumption is that it will not be able to recognise the remaining 60 million income derived from the capacity market for 2018/19 in the current financial year," it said.

The Scotland-based company said it expected adjusted earnings per share in the range of 64 pence to 69 pence ($0.83 to $0.89), down from forecasts in November for 70 pence to 75 pence.

SSE shares fell 1.7 percent in early trading.

SSE said it was working on options for its energy service business after the collapse of plans to merge retail operations with Innogy’s npower last year.

Options include a standalone demerger, listing, another sale or retaining it as a separate, ring-fenced business within the SSE group that it said it expected to be cash flow positive.

SSE said it would provide a further update on the retail business by the end of March.

Large energy suppliers in Britain have struggled against competition from smaller, nimbler rivals often able to offer cheaper prices.

Energy regulator Ofgem imposed a cap on average standard prices from Jan. 1 which, at 1,137 pounds a year, was well below the standard prices of most of Britain's six main energy firms.

Ofgem said this week the cap on prices would rise by more than 10 percent from April 1.

(Reporting by Susanna Twidale in London; Additional reporting by Devika Syamnath in Bengaluru; Editing by Bernard Orr)

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