SSE trims earnings guidance as 'variable weather' weighs on renewables growth

Importance Score: 35 / 100 🔵

SSE Adjusts Earnings Outlook Amidst Variable Weather Impact on Renewables

Energy provider SSE has revised its full-year earnings forecast downwards, citing persistent variable weather conditions as a significant factor affecting its renewable energy generation. The energy company noted that while investments in capacity have enhanced wind power production, adverse weather, including cold spells and storms, has negatively influenced its distribution network’s performance.

Renewable Energy Output Affected by Weather Variability

Increased Capacity Offsets by Challenging Conditions

The power generation firm anticipates reporting renewable energy output of approximately 13 terawatt-hours for the fiscal year ending March 28th. This figure represents a 17 percent increase compared to the previous year. SSE indicated that this growth reflects both “capacity additions” and the “variable weather conditions which have persisted in the concluding months of the year,” impacting overall output.

Prior Earnings Guidance Narrowed Due to Weather

Notably, SSE had already refined its earnings projections last month, referencing weather conditions that constrained renewable output growth to 26 percent for the nine-month period concluding on December 31st.

Revised Earnings Per Share Forecast

The company now projects adjusted annual earnings per share to be in the range of 155p to 160p. This is a downward adjustment from the prior guidance issued in February, which estimated earnings of 154p to 163p per share.

The power generator operator expects to post renewables output of around 13 terawatt-hours for the 12 months to March 28

Market Response and Network Performance

Share Price Increase Despite Guidance Revision

Despite the reduced earnings outlook, SSE shares experienced a rise of 0.8 percent in early trading, reaching 1,593p. This increase occurred as the company reassured investors regarding the robust operational performance of its regulated networks division. SSE affirmed that overall group profit expectations remained unchanged.

Share Value Below Peak Amidst Energy Market Shifts

However, company shares remain nearly one-fifth below their peak value from September 2024. This reflects a broader decrease in energy generation pricing and evolving assumptions concerning returns on wind energy assets.

Investment and Future Targets

£3 Billion Investment Focused on Efficiency

SSE is currently undertaking investments of approximately £3 billion this year, prioritizing “value and efficiency” in its capital expenditure, according to company statements.

Fiscal Year 2026/27 Earnings Targets

Looking ahead, the group has set a target for adjusted earnings per share of 175p to 200p for the fiscal year 2026/27, signaling continued growth aspirations despite current weather-related challenges.

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