National Grid H1 Pre-tax Profit Down, Despite Higher Revenues - Update

(RTTNews) - National Grid PLC (NG.L, NGG), a UK-based electricity and gas utility, reported Thursday a decline in first-half pre-tax profit on higher costs, despite growth in revenues. The company noted that its overall performance in the first six months was consistent with its expectations for the full year.

Chief Executive Steve Holliday stated that the new eight-year price controls, covering the company's principal UK regulated activities, and the recent rate case settlements in the US provide it with the long-term framework and clarity to continue to invest for the future.

For the first half, pre-tax profit declined 11 percent to 1.05 billion pounds from 1.18 billion pounds last year. Profit attributable to equity shareholders of the parent was 1.24 billion pounds or 33.1 pence per share, compared to 979 million pounds or 26.2 pence per share, in the previous year.

Exceptional items, remeasurements and stranded cost recoveries increased statutory net earnings by 481 million pounds, the company noted.

Adjusted pre-tax profit, which excluded items, was 979 million pounds, compared to last year's 1.05 billion pounds. The results reflected the temporary additional cost of pre-financing asset growth at attractive interest rates, the company said. Adjusted earnings per share decreased to 20.3 pence, from 20.5 pence a year ago.

Operating profit declined 12 percent to 1.54 billion pounds, while adjusted operating profit edged down 1 percent reflecting the expected end of Niagara Mohawk deferral income recoveries and higher US system implementation costs.

Revenue, however, increased to 6.72 billion pounds from 6.08 billion pounds in the previous year.

Further, the company said its Board has approved an interim dividend of 14.49 pence per ordinary share or $1.1694 per American Depositary Share, as announced in March. The dividend would be paid on January 22, to shareholders on the register as at December 6.

Looking ahead, Steve Holliday said, "Our UK businesses started their first year under the new RIIO price controls well, making good early progress and are on track to deliver strong returns for the year as a whole. In the US, we are taking actions to improve internal processes and IT systems to support continued delivery of long-term profitable growth. Overall, we again look set to invest well over £3bn, grow our asset base and deliver another year of good operating performance. Taken together, this supports our commitment to sustainable dividend growth."

In London, National Grid shares are currently trading at 763.34 pence, down 4.66 pence or 0.61 percent.