UK National Grid sees underlying earnings drop
UK and North American energy transmission company National Grid reported a boost in statutory profit but a drop in underlying profit May 20. Statutory operating profit was up 4% at £2.9 ($4.1)bn and EBIT was £2.1bn (up 19%). Underlying operating profit was down 5% at £3.3bn and underlying EBIT down 3% at £2.4bn.
CEO John Pettigrew said despite COVID-19 the company had made over £5bn of capital investment and still achieved a solid underlying financial performance. "This is testament to the strength and resilience of our business model and the unwavering commitment of our employees," he said.
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He said the company had "numerous opportunities in the UK and US to provide energy security and support the delivery of net zero. Our critical role in the energy sector, alongside our position as a principal partner at COP26, provides us with a unique opportunity to call for more ambitious action towards a clean energy future and a strong platform from which to generate value for all our stakeholders."
The company also set out its plans for the coming five years, including the effects of the acquisition of US power assets and the sale of a majority stake in its UK gas transmission business by 2023.
It sees cumulative capex of £30bn-£35bn; compound annual asset growth of 6%-8% backed by strong balance sheet; underlying earnings/share growing 5%-7%/yr and credit metrics remaining within current rating thresholds.