OREANDA-NEWS. SSE plc completed the third quarter of its financial year on 31 December 2015. This trading statement: 

· includes information about SSE’s operational and investment activities for the nine months to 31 December 2015;
· provides updates on key developments since SSE published its interim results on 11 November 2015;
· announces that SSE will reduce household gas prices in Great Britain by 5.3% on 29 March 2016;
· confirms SSE remains on target to deliver adjusted earnings per share* for 2015/16 of at least 115 pence;
· confirms that SSE still expects to report an increase in the full-year dividend for 2015/16 that will at least be equal to RPI inflation; and
· confirms that SSE is targeting an increase in the full-year dividend for 2016/17 of at least RPI inflation, with annual increases thereafter of at least RPI inflation also being targeted.

Alistair Phillips-Davies, Chief Executive of SSE, said: “SSE continues to fulfil its core purpose of providing the energy people need in a reliable and sustainable way. I am pleased that we have been able to announce a reduction in retail gas prices – our third consecutive reduction in household energy prices – and to achieve a significant reduction in the number and duration of power cuts experienced by our networks customers. “Market conditions, however, continue to be challenging. Nevertheless, SSE remains a resilient and diverse business, with a strong commitment to operational efficiency and delivering value for customers and investors. It remains firmly focussed on delivering this year’s financial objectives and making sure that the business is fully prepared for the future.”

Operations in the nine months to 31 December 2015

In the nine months to 31 December 2015 (comparisons with the same nine months in 2014, unless otherwise stated):

· SSE's Total Recordable Injury Rate was 0.12 per 100,000 hours worked, compared with 0.12 during 2014/15 as a whole;
· Wholesale: total electricity output1 from gas-fired power stations was 6.6 TWh, compared with 7.5TWh; from coal-fired power stations output was 3.7TWh, compared with 5.1TWh;
· Wholesale: total electricity output1 from renewable sources (conventional and pumped storage hydro electric schemes, onshore and offshore wind farms and dedicated biomass plant) was 6.8TWh, compared with 5.6TWh;
· Wholesale: total output from gas production assets was 290 million therms, compared with 296 million therms;
· Networks: the number of Customer Minutes Lost2 in the Scottish Hydro Electric Power Distribution area was 42, compared with 50; in the Southern Electric Power Distribution area it was 30, compared with 43;
· Networks: the number of Customer Interruptions (power cuts) per 100 customers in the Scottish Hydro Electric Power Distribution area was 49, compared with 53; in the Southern Electric Power Distribution area, it was 34, compared with 46;
· Retail: SSE's number of electricity and gas customer accounts in markets in Great Britain and Ireland fell from 8.58 million on 31 March 2015 to 8.28 million; during the same period, the number of home services customer accounts increased by 14% to over 390,000;
· Retail: average consumption of electricity by SSE's household customers in Great Britain is estimated to have fallen by 3% from 2,700kWh to 2,618kWh; average consumption of gas by SSE's household customers in Great Britain is estimated to have remained flat at 240 therms; and
· Retail: in total to 31 December 2015, SSE had installed over 135,000 smart meters in customers homes.

Relative to the 1981-2010 average used by the Met Office, the nine months period to 31 December 2015 was 0.5C warmer than average in the UK; and there was 110% of average rainfall in the north of Scotland, where SSE’s hydro electric schemes are located.

Managing electricity networks for customers

Since the start of October 2015, SSE’s electricity distribution business has issued nine weather warnings in relation to its Networks, and has experienced one so-called ‘exceptional event’ as a result of Storm Frank in late December 2015 affecting its network in the north of Scotland. It brought winds of up to 90mph and resulted in significant flooding issues. In extremely challenging working conditions power was restored to 93% of customers within 12 hours. SSEPD worked collaboratively with the Emergency Services, Local Authorities and other agencies to ensure that its customers were looked after.

Disposing of assets to support future investment

SSE has an established value programme which aims to deliver the disposal of assets which are not core to its future plans, result in a disproportionate financial burden or which could release capital for future investments. The disposal of such assets is taken into account in SSE’s total expected net capital and investment expenditure of £5.5bn across the four years to March 2018. Proceeds and debt reduction from these planned and completed disposals are expected to result in a financial benefit in excess of £1bn and, to date, disposals with a total value of around £650m have been completed or agreed.

Investment in the nine months to 31 December 2015

SSE expects that its capital and investment expenditure will total around £1.65bn (gross) in 2015/16 and in the nine months since 1 April 2015 spend included:

· Wholesale: over £200m in new onshore wind farms and almost £30m in E&P;
· Networks: over £400m in Transmission investment, including progress with the Caithness-Moray transmission line, the largest capital project undertaken by SSE;
· Retail: investment totalling over £100m in energy supply and related services, including work associated with the roll-out of smart meters and improving digital services for customers.