SSE Airtricity slumps to €3.4m loss as customer numbers dip

The Irish-based energy provider closed the six-month period to September with 680,000 customers; marginally down on the 700,000 figure it boasted 12 months previously.
SSE Airtricity made a £2.9m (€3.4m) loss and saw a dip in customer numbers in the first half of its current financial year.
Half-year results for the company’s parent – British energy utility SSE – show that the Irish-based energy provider closed the six-month period to September with 680,000 customers; marginally down on the 700,000 figure it boasted 12 months previously.
Its first-half losses compared to an adjusted operating profit of £16.6m for the first half of last year. SSE Airtricity – which, last month, increased its energy prices for the third time this year – currently holds a 23% share of the all-Ireland energy market.
On a group basis, SSE’s shares plunged the most in more than a year after the utility rejected calls for a break-up of its business as it unveiled a green spending drive funded by a dividend cut and asset sales.
The energy company expects to sell a 25% stake of both its transmission and distribution grid assets in the UK. The sale, combined with a 40% dividend cut from 2024, will fund a £12.5bn increase in spending for net-zero infrastructure over the next five years.
SSE made clear that it would not be breaking up the company, despite pressure from activist investor Elliott Investment Management. The activist hedge fund, which has been meeting privately with SSE officials and other major shareholders, sees value in separating the company’s renewable portfolio from its regulated grid business.
The strategy to boost its net-zero growth may not be enough to appease Elliott’s call for a spin-off of the renewables unit, according to Paul Vickars, a credit analyst at Bloomberg Intelligence. While the plan helps SSE’s credit profile, it doesn’t unlock the equity-valuation upside of a renewables IPO.
“It’s clear that keeping the business together is core to the strategy,” Alistair Phillips-Davies, SSE’s chief executive said.
“We’ve got the optimal package and I think we’ll get strong support from shareholders across the board,” he said.
The increase in spending for networks and renewables was broadly anticipated, but investors were waiting to see how it would be funded, said John Musk, an analyst at RBC Europe.
SSE “has confirmed market fears that this would come with a dividend cut,” he said. “We think the market may be disappointed more drastic action was not announced.”
SSE is hoping its new strategy will help it take advantage of strong interest in infrastructure assets and regulated utility businesses from investment funds seeking stable, long-term returns. It can then plough that money into developing its clean energy projects, which include the world’s biggest offshore wind farm.
The company’s portfolio includes about 4 gigawatts of wind and hydroelectric power assets and the investment plan will double that capacity by 2026.