A fresh round of energy price rises looked inevitable today as Scottish & Southern Energy (SSE) issued a stark warning that its first- half profits would be substantially lower than the results achieved in previous years.

Ian Marchant, chief executive of SSE, said that it was becoming increasing difficult to keep retail energy prices down, as wholesale prices soar.

"The extent of the energy shock with which the entire global economy is having to contend has been well-documented, and its full impact on prices for electricity and gas in the UK has still to be felt. We are continuing to resist the pressure to put up prices for domestic customers, but doing so is becoming more difficult by the day," Mr Marchant said.

In previous years, SSE has made most of its pre-tax profits in the first six months of the year. However, this year the second half is expected to be stronger.

The energy supplier, which has more than 9 million customer accounts, said in a statement for the annual meeting that a stronger second half is expected to result in a marginal rise in full-year adjusted pre-tax profit, compared with last year when the second half was weaker than the first.

"In line with this, adjusted profit before tax for the six months to 30 September 2008 will be substantially lower than in the same six months in 2006 and 2007," it said in an interim management statement released today.

The statement continued: "So far, 2008/09 has been characterised by extremely volatile wholesale markets for electricity and gas, and this may continue. Despite this, SSE still expects to deliver a modest increase in adjusted profit before tax in the year to March 31 2009."

The company said that it remained committed to delivering a dividend increase of at least 4% real growth. It added that the dividend growth would be possible because of a step-up in investment, including the many opportunities arising from its acquisition of Airtricity, the Irish wind farm business.

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