National Grid Profit Rises as U.K. Growth Offsets U.S. CostsLouise Downing
National Grid Plc, the operator of energy networks in the U.K. and North America, said fiscal full-year earnings rose 6 percent as growth in its British business countered costs from a hurricane that hit the U.S. in October.
Operating profit climbed to 3.75 billion pounds ($5.7 billion) in the 12 months through March from 3.54 billion pounds a year earlier, the London-based company said today in a statement. That exceeded the 3.68 billion-pound median estimate of eight analysts surveyed by Bloomberg.
U.S. storms including Hurricane Sandy, which knocked out power to about 1.1 million National Grid customers in Long Island, cut operating profit by about 136 million pounds, the company said. Results were bolstered by business growth back home, where operating profit from gas distribution rose 4 percent and earnings from transmission jumped 19 percent.
National Grid started a new dividend policy on April 1, aimed at raising the ordinary annual payout at least in line with inflation for the “foreseeable future.” It expects to pay a full-year dividend of 40.85 pence a share for the year ended March 31, compared with 39.28 pence a share a year earlier.
Ofgem, the U.K. energy regulator, introduced price controls in April governing the company’s power and gas grid. The “well designed” measures will last for as much as twice as long as in the past, allowing the utility to deliver returns for shareholders while investing in infrastructure, it said.
“We are changing gear now, we’re entering a period of exceptional clarity for all of our businesses,” Chief Executive Officer Steve Holliday said today on a conference call. “These price controls with Ofgem give us clarity for eight years, a clear framework against which we will invest some 25 billion pounds in the U.K. over that period.”
The utility invested 3.7 billion pounds over the fiscal year, contributing to 2.7 billion pounds of growth in regulated assets. National Grid’s shares dropped 1.7 percent to 830 pence in London at 3:05 p.m. local time.