ONE of the UK’s biggest energy suppliers revealed a sharp rise in profits today before warning it may have to hike prices next year.
Scottish & Southern Energy (SSE), which owns Southern Electric, Swalec and Scottish Hydro Electric, said the 36% increase to £410.5 million was flattered by comparisons with a year earlier, when delayed price rises hit margins.
It said the performance in the six months was consistent with its overall goal of a "moderate, single-digit increase" in profits for the full year.
The company, which has more than nine million electricity and gas accounts, said its main gas supply business traded at a loss in the half year, while higher forward annual wholesale prices and rising distribution and environmental costs were adding to pressure on the business.
It said: "While SSE would like to follow the reduction in energy prices it implemented in March with a further reduction if it were possible, it is not able to commit to do so.
"It remains committed, however, to ensuring its prices and, more importantly, bills, are as low as possible over the medium term.
"Given the upward pressures on energy prices, avoiding an increase between now and the end of 2010 remains an important goal."
Scottish highlighted the upward pressure on prices by launching a new product, which will enable customers to fix the price of their electricity and gas at about 5% below current standard tariff prices until August 2011.
In today’s results, the company said it achieved a net gain of 100,000 energy supply customer accounts in the half year, the eighth successive year in which it has achieved a net gain in customer numbers.
As well as supplying gas and electricity, the company is the second largest electricity generator in the UK and Ireland with facilities such as the Fiddlers Ferry coal-fired site in Cheshire.
It is currently more than 18 months into a five-year, £6.7 billion programme of investment in electricity generation, energy networks and gas storage.
