SSE H2 Earnings Call Highlights
SSE (LON:SSE) said it delivered full-year earnings toward the top end of its guidance range while accelerating investment across its regulated networks, renewables and flexible generation businesses, as management emphasized the company’s role in supporting electrification and energy security.
Chief Executive Martin Pibworth, presenting his first full-year results as CEO, said SSE met its “overriding safety goal” of no life-changing injuries. He said injury rates have remained broadly flat despite a doubling of contractor hours over five years as investment has accelerated, crediting in part the company’s immersive safety training program, which about 14,000 people have completed.
Pibworth framed the company’s strategy around what he described as a growing need for homegrown energy infrastructure amid geopolitical volatility and concerns over fossil fuel import exposure. He said SSE’s portfolio of networks, renewables and flexibility was positioned to support energy independence, reduce exposure to gas price volatility and contribute to lower bills over time.
Investment plan centered on networks
SSE reiterated its GBP 33 billion five-year investment plan, with Pibworth saying the company has “real momentum” behind the program. He said 80% of the planned investment is in regulated networks, which management expects to deliver a compound annual growth rate of about 25%.
Pibworth said the company continues to target earnings per share of 225p to 250p by 2030, equivalent to a 10% to 13% annual growth rate following the November equity raise and the company’s FY 2026 earnings announcement. He also said index-linked earnings are expected to rise to around 80% by 2030.
Transmission remains the biggest near-term opportunity in the plan. Pibworth said transmission investment increased 80% year over year, with construction underway on five major projects in the north of Scotland. Around three-quarters of transmission consents have been approved, with nine outstanding consents expected to be decided within the next 12 months.
The CEO said SSE has secured strategic equipment and supply chain partners for its transmission investment, while internal staffing in the transmission business has increased more than 20% in the past year and fivefold over five years. He also cited innovations including modular substations and drone use for overhead line work.
Earnings decline as expected; dividend rises
Chief Financial Officer Barry O’Regan said FY 2026 earnings were lower than the prior year, as expected, due to lower distribution earnings and dilution from the November equity raise. SSE reported earnings per share of GBP 1.535, which O’Regan said was toward the top end of full-year guidance.
The group delivered record annual capital expenditure of GBP 3.6 billion. O’Regan said investment is feeding into growth in the regulatory asset base, with 60% of underlying earnings index-linked during the year. SSE recommended a 7% increase in dividends, which O’Regan said was in line with its progressive dividend policy.
In networks, O’Regan said transmission and distribution delivered investment and adjusted operating profit in line with expectations. Distribution earnings fell significantly year over year, principally because the prior year benefited from inflationary catch-ups, but capital investment across networks rose by about 60%, driving more than 20% growth in the regulatory asset base.
In renewables, O’Regan said wind conditions were broadly in line with long-term averages, although hydro conditions varied by quarter and hedge prices were lower year over year. Adjusted operating profit in renewables rose to an all-time high as new capacity came online, including contributions from Dogger Bank and Yellow River Wind Farm.
Conventional thermal generation and gas storage earnings were slightly lower than the prior year due to outages and market conditions, O’Regan said. Spark spreads remained relatively low, and seasonal spreads were disappointing for gas storage despite market volatility.
Balance sheet and outlook unchanged
O’Regan said adjusted net debt and hybrids were flat year over year despite record investment, supported by cash flow and the GBP 2 billion equity raise. Leverage was stable at 3.3 times net debt to EBITDA, and the company had about GBP 7.4 billion of liquidity at year-end, enough to cover net financial commitments for the next 17 months.
He said 92% of debt was fixed-rate, at an average cost of around 4.1%, providing protection against inflation. O’Regan also said the company expects more than GBP 100 million of savings during FY 2027 from efficiency measures, rising to more than GBP 200 million in recurring savings by the end of FY 2028.
Despite volatility tied to conflict in the Middle East, O’Regan said SSE does not currently anticipate an immediate change to FY 2027 projections. The company maintained its FY 2027 earnings expectations of GBP 1.68 to GBP 1.93 per share, adjusted for the November share issuance, and reiterated its FY 2030 earnings target of GBP 2.25 to GBP 2.50 per share.
Renewables, flexibility and data centers
Pibworth said turbine installation at Dogger Bank A is complete, with commissioning expected to be substantially complete by the end of 2026. At Dogger Bank B, 20 turbines have been installed and first power has been achieved. Dogger Bank C completed installation of transition pieces in November 2025.
For Berwick Bank, Pibworth said SSE has consent and a 20-year contract for difference for phase B, with a final investment decision expected in 2027. In response to an analyst question, he said buildout would take about four years from FID. O’Regan said major renewables projects would likely not be owned 100% by SSE through FID, with project finance debt and sell-downs forming part of the approach.
SSE also highlighted battery and flexible generation projects, including the 150 MW Ferrybridge battery, battery installation at Monk Fryston and Fiddlers Ferry, and flexible generation projects at Tarbert and Platin, expected to enter full commercial operations in 2027 and 2028, respectively.
Asked about data centers, Pibworth said SSE is well positioned through its Irish power supply relationships, southern distribution license area, generation sites and customer business. O’Regan clarified that no financial upside from data centers is included in the company’s plan to 2030, with any benefit more likely toward the end of the plan or in the early 2030s.
Analyst questions focus on policy, grid timing and inflation
During the question-and-answer session, analysts asked about potential wholesale contracts for difference, capacity markets, distribution regulation, renewables impairments and political risk. Pibworth said SSE would engage constructively with government consultations but cautioned against “meddling with market mechanisms” where markets are already delivering some policy outcomes.
O’Regan said impairments related to two Scottish onshore wind projects with AR5 contracts were tied to delayed grid connections and higher capital costs from the delays, but described the issue as isolated within SSE’s portfolio.
On inflation in transmission projects, O’Regan said five projects are already in construction with contracts locked down, while the remaining six will not move to final investment decision until costs are known. He said price adjustment mechanisms and contingency analysis were included in the company’s planning.
About SSE (LON:SSE)
SSE is a leading generator of renewables and flexible energy in the GB and Ireland markets, and one of the world's fastest-growing electricity networks companies. This includes onshore and offshore wind farms, hydro, electricity transmission and distribution networks, power stations, carbon capture and hydrogen, solar and batteries, as well as providing energy products and services for businesses and other customers. SSE's more than 14,000 employees are dedicated to delivering cleaner, more secure energy and ensuring a just transition to a net zero future.
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