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SSE profits large but still down

May 21, 2014 by Tez

SSE published details of annual profits today of £246 million – even though this is actually a 32.2% decrease. The energy giant is unlikely to recover after it announced a price freeze on its electricity tariffs until January 2016. This promise was made a day before Ofgem, the industry regulator, announced it would be conducting a full scale probe into the energy sector.

It’s not all doom and gloom for them as the wider group saw adjusted pre-tax profits increase by 9.6% to £1.55 billion. The milder winter, which saw less energy being used by customers, is said to be one contributing factor to the lower figures. Alistair Phillips-Davies commented how the pledge to freeze prices has been hugely popular. He said that it’s the only commitment they can give to customers and will see retail profits taking a hit over the next couple of years.

SSE’s gas and electricity production has boosted the short fall – an area of the business that saw a 24.8% increase. It’s energy distribution arm also increased by 9.3%.

Lord Smith of Kelvin, SSE’s chairman said: ‘The issues facing the energy sector are very challenging. We believe SSE is not part of the problem but part of the solution to meeting the energy needs of customers in Great Britain and Ireland.'

Consumer group Which executive director Richard Lloyd said: ‘SSE needs to do more on customer bills. 'With healthy group profits and wholesale gas prices falling, we expect SSE to promise not just to shield people from price increases but to fairly pass on lower costs to their customers.'

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