By Geoffrey Smith
Investing.com -- Shares in SSE (LON:SSE) rose to the top of the FTSE 100 on Friday after the U.K.-based power generator raised its profit guidance, thanks to a year of record-high wholesale energy prices.
SSE said it now expects earnings per share in the year through March to be around 150 pence, some 20p above the market consensus and well above its own most recent guidance of 'at least 120p'.
SSE stock rose 2.5% in response, to its highest in seven weeks.
"SSE is performing well in a shifting and volatile energy landscape, underlining the strength of our balanced business mix and the quality of our assets," Finance Director Gregor Alexander said in a statement.
The company said the upgrade reflected the recent fall in forward prices for electricity and gas, which have reduced the cost of buying back its hedges against future commitments. As of January 18th, nearly a quarter of the group's available liquidity was tied up in such contracts.
SSE also noted "greater clarity" over the U.K. government's plans to impose a windfall tax on the profits of energy companies. In its latest budget in November, the government introduced a 45% levy on the excess profits of power generators.
Around two-thirds of SSE's power still comes from gas-fired stations, which have had to run more than expected this year despite surging fuel prices, as output from its offshore wind business has fallen over 20% short of plan.