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UK cold weather boosts profits at SSE

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SSE company logo SSE has announced pre-tax profits of £1.4 billion for the past 12 months, a rise of more than 5% on the same period last year. This comes despite a substantial fine from regulator ofgem in the wake of the recent mis selling scandal.

SSE’s chairman, Lord Smith of Kelvin, said the company had faced “two of the biggest issues” in its history in recent months.

“In consecutive weeks in the early spring of 2013, SSE confronted two of the biggest issues it has had to face since it was formed in 1998,” he said.

“The last week of March saw extreme snow falls and ice in the west of Scotland which inflicted unprecedented damage on the electricity network on Arran and Kintyre. Over 500 engineers and other employees from the company were deployed to help restore electricity supplies.”

Recent cold weather across the UK has driven household gas usage up by around 20% year on year with electricity usage up around 5%.

Despite a recent drop in customers SSE’s retail operations have been boosted by 27.5% the business currently has has 9.47 million customers, down 80,000 the same time last year.

Pricing issues

SSE said: “Unless there is a sustained reduction in prices in wholesale gas and electricity markets, it is highly likely that these additional costs will eventually have to be reflected in higher prices for household customers.

“Nevertheless, SSE intends to resist this trend of higher costs for as long as possible to shield customers from the unwelcome impact of higher prices.”

Last week, Centrica announced that it had seen UK residential gas usage increase by 18% in the first four months of 2013 in the wake of widespread cold weather across much of the country.

Centrica said that “recognising the economic pressures facing many of our customers, the board has determined that any benefit arising from the exceptionally cold weather will be used to maintain our price competitiveness”.

Ann Robinson, speaking on behalf of uSwitch.com, said “Suppliers have benefitted from the extended and unseasonal cold snap this year. While British Gas has pledged to use this benefit to maintain its price competitiveness, there has been no such pledge from other suppliers.

“This is very disappointing and we would urge SSE, with its profits announced today, to take the lead in helping consumers by making a firm new commitment on prices.”

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