SSE announces 9.6% profit rise despite ‘challenging times’ and customer loss

Big six energy firm SSE has revealed it has increased its pre-tax profits to £1.5 billion, a 9.6% rise compared to the previous year. However, the firm has admitted it is having hard times and losing customers.

The company gained criticism, along with the other big energy suppliers, last year in November when it announced an 8% energy price rise for its customers. The firm said the move caused the loss of around 370,000 customers, who decided to switch energy supplier.

SSE said later in March that it would have frozen energy tariffs for its users until January 2016, a measure that would cut profits by £100 million, according to the company.

Alistair Phillips-Davies, SSE chief executive, said, “We introduced our price freeze right at the end of the last financial year and it has been hugely popular. It remains the only such commitment available to all customers and will mean we take a hit on retail profits over the next couple of years”.

Despite the profit increase – from £1.4 billion of the previous year to £1.5 billion – the company said that competition and a mild winter made retail profits drop by 28%, while those in its wholesale arm grew.

Richard Lloyd, executive director of consumer group  Which?, said he was glad that the firm decided to keep prices frozen but added, “Now, with healthy group profits and wholesale gas prices falling, we expect SSE to promise not just to shield people from price increases but to fairly pass on lower costs to their customers.”

Leading renewable energy suppliers Good Energy and Ecotrocity also froze energy tariffs last winter, at a time when other companies were announcing price rises. Good Energy then saw its customer base rise by 32% thanks to dissatisfied big six customers switching.

Photo: Lydia via flickr

Further reading:

Unhappy ‘big six’ customers flock to Good Energy, whose profits see sharp rise

‘Big six’ energy firms admit to failing customers

Smaller independent energy firms a ‘cheaper alternative’ to big six

SSE announces price freeze until 2016

SSE announces profit increase thanks to higher energy bills