British gas and electricity provider Scottish & Southern Energy Plc (SSE.L), Wednesday, in its interim management statement, said it remains on track to deliver a moderate increase in adjusted pre-tax profit for fiscal 2010. The company expects to deliver a full-year dividend of at least 70 pence per share, and to achieve financial and operational goals for the period to March 31, 2010.
For the nine months to December 31, 2009, the Perth, UK-based company's total recordable injury rate was 0.13 per 100 thousand hours worked as compared with 0.16 in fiscal 2009, and number of electricity and gas supply customer accounts in Great Britain market were up 200 thousand from the prior-year period to 9.25 million, including customers in all-island market in Ireland and home services. Currently, Scottish & Southern's total customer base is 9.75 million.
The company noted that wholly-owned gas-fired power stations achieved 93% of their maximum availability to generate electricity, excluding planned outages, as compared with 76% in the same period last year. For the period, coal-fired stations achieved 93% versus 89% a year ago, wind farms achieved 97% compared to 96% in the prior year.
In the nine-month period, the number of units of electricity distributed were 30 terrawatt hours, or TWh, as compared with 31.2 TWh in the year-earlier period. In Scottish Hydro Electric Power Distribution area, the number of customer minutes lost was 53 compared to 52 in the previous year, and in Southern Electric Power Distribution area, customer minutes lost was 49 versus 47 in the comparable period prior year.
In the year-to-date period, the amount of gas transported by Scotia Gas Networks, in which Scottish & Southern has a 50% stake, decreased to 97 TWh from 110.7 TWh in the corresponding period last year, while the amount of replacement and reinforcement gas mains laid by Scotia Gas was 917 kilometers, or km, as compared with 835 km in nine-month period prior year.
Along with its first half results announced in November 2009, Scottish & Southern said its priorities for the rest of the financial year 2009/10 include delivering efficient investment throughout its activities, particularly in the major projects in generation, electricity networks and gas storage. The company stated that since then, progress has been made in Marchwood, Greater Gabbard, Clyde, Griffin, Beauly-Denny and Aldbrough areas.
Marchwood Region
Scottish & Southern said the new 840 megawatt, or MW, combined cycle gas turbine, or CCGT, power station at Marchwood, near Southampton, in which it has a 50% ownership stake, entered full commercial operation in December 2009, making it UK's first new large-scale CCGT power station to enter commercial operation for five years. The company expects Marchwood to deliver a thermal efficiency in excess of 58% and all of its output is contracted to Scottish & Southern. Scottish & Southern noted that the station has performed as anticipated since it entered commercial operation, with no operational issues.
Greater Gabbard Region
According to the company offshore construction work is continuing at the 500MW offshore wind farm being developed by Greater Gabbard Offshore Winds Ltd., a 50:50 joint venture between Scottish & Southern and RWE npower renewables. Following the initial delay in commencing foundation installation, good progress has been made and a total of 69 of the 140 turbine foundation monopiles have presently been installed, as has the first of two offshore transformer platforms, Scottish & Southern noted.
Greater Gabbard is estimated to have a load factor of more than 40% and produce nearly 1,900 Gigawatt Hour, or Gwh, of electricity in a typical year, of which Scottish & Southern will take 50%, and the wind farm is anticipated to require a total investment of about GBP 650 million by Scottish & Southern, excluding connection to electricity grid. The development remains on course to be completed in 2012, the company added.
Clyde Area
Work at the site of Scottish & Southern's 350 MW Clyde wind farm in southern Scotland is continuing, following the resolution of secondary, and some of primary, radar-related issues with regard to the consent granted for development, the company noted.
Scottish & Southern said C A Blackwell Ltd. has been appointed as the main works contractor for South section of the wind farm. Clyde is estimated to have a load factor of approximately 35% and produce over 1,000 GWh of electricity in a typical year. Scottish & Southern expects the first phase of the development to be completed in 2011 and the second phase in 2012, and its total construction cost to be about GBP 500 million.
Griffin Region
The company said that pre-construction work is well under way at Griffin wind farm site in Perthshire, in which Scottish & Southern currently has a 100% stake. The tendering process for turbines is anticipated to be completed shortly, and annual output is estimated to be between 350 GWh and 400 GWh. Scottish & Southern's construction cost is forecasted to be nearly GBP 200 million and is expected to be completed in 2012.
Beauly-Denny Area
In January, Scottish Ministers announced that they have granted consents, with associated conditions, to install a 400 thousand volt overhead electricity transmission line to replace the existing 132 thousand volt overhead transmission line between Beauly and Denny, and that the existing line will be dismantled.
Aldbrough Region
Scottish & Southern and Statoil Ltd. are continuing to make progress at their gas storage facility being constructed at Aldbrough in East Yorkshire, Scottish & Southern said. In December 2009, capacity for storage at Aldbrough became available in a third cavern, taking the current total to about 100 million cubic metres. Scottish & Southern expects storage in a fourth cavern to become available within the next few months, and said the project remains on course for completion in 2012.
Scottish & Southern added that it remains unlikely that any electricity will be generated at Glendoe until the financial year 2011/12.
According to the latest analysis, gas consumed by Scottish & Southern's household customers was approximately 5% lower per customer between October 2009 and January 2010 than in the same period 12 months ago, and consumption of electricity was about 4% lower per customer.
Commenting on the update, Chief Executive Ian Marchant said, "we remain on course to deliver a moderate increase in adjusted profit before tax and a dividend of at least 70 pence per share for the full year. Our priorities now are to round off this financial year successfully and make a good start to 2010/11."
For the first half of fiscal 2010, Scottish & Southern's attributable profit surged to GBP 377.9 million or 40.9 pence per share from GBP 128.2 million or 14.7 pence per share in the same period last year. Half yearly revenues were GBP 8.04 billion versus GBP 9.19 billion in the year earlier. The company intends to announce its full year results on May 19, 2010.
SSE is currently trading on the London Stock Exchange at 1,177.74 pence per share, down 12.26 pence or 1.03%, on a volume of 491,729 shares. In the past 52-week period, the stock has been trading in a range of 1,024.00 pence to 1,254.00 pence.
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