National Grid Boosts Pretax Profit 16% On Lower Costs
19.11.09, 09:45 Uhr
LONDON -(Dow Jones)- Gas and power network operator National Grid PLC (NGG) Thursday posted a 16.3% rise in pretax profit, despite flat revenue, for the first half of the fiscal year due to lower financing costs and higher operating cash flow.
"We have made good operational and financial progress against our priorities for this year and have delivered a very strong financial performance in the first half," said Chief Executive Steve Holliday in a statement.
Earnings are particularly strong this year because borrowing costs are low and the regulated tariffs National Grid can charge for U.K. transmission and distribution services are based on last year's inflation measure, the retail price index, which was higher, Holliday said. National Grid has also benefited because a fifth of its U.K. debt payments are linked to lower inflation this year, he said.
The company is on track to deliver this year's investment program of GBP3.4 billion and has already completed its fund-raising requirements for the year, Holliday said.
The U.K.-based utility said pretax profit excluding exceptional items for the six months ended September 30 totaled GBP649 million, compared with GBP558 million for the first half of the 2008-2009 fiscal year.
Net profit for the first half, which was boosted by a gain of GBP295 million on exceptional items, was up 64.5% at GBP696 million, compared with GBP423 million a year earlier. Most of the exceptional gain was recovery of stranded costs related to investments in its U.S. unit made in nuclear power in the 1980s, said Finance Director Steve Lucas.
Total revenue was down 0.5% to GBP6.04 billion from GBP6.07 billion in the same period last year.
Diluted earnings per share were 28.1 pence compared with 16.1 pence the previous year.
National Grid shares closed at 640 pence Wednesday, up 0.3%, or 2 pence on the day.
Earnings are particularly strong this year because borrowing costs are low and the regulated tariffs National Grid can charge for U.K. transmission and distribution services are based on last year's inflation measure, the retail price index, which was higher, Holliday said. National Grid has also benefited because a fifth of its U.K. debt payments are linked to lower inflation this year, he said.
The company is on track to deliver this year's investment program of GBP3.4 billion and has already completed its fund-raising requirements for the year, Holliday said.
The U.K.-based utility said pretax profit excluding exceptional items for the six months ended September 30 totaled GBP649 million, compared with GBP558 million for the first half of the 2008-2009 fiscal year.
Net profit for the first half, which was boosted by a gain of GBP295 million on exceptional items, was up 64.5% at GBP696 million, compared with GBP423 million a year earlier. Most of the exceptional gain was recovery of stranded costs related to investments in its U.S. unit made in nuclear power in the 1980s, said Finance Director Steve Lucas.
Total revenue was down 0.5% to GBP6.04 billion from GBP6.07 billion in the same period last year.
Diluted earnings per share were 28.1 pence compared with 16.1 pence the previous year.
National Grid shares closed at 640 pence Wednesday, up 0.3%, or 2 pence on the day.
Company Web site: http://www.nationalgrid.com
DJG/isj
