UPDATE: National Grid Boosts Pretax Profit 16% On Lower Costs
(Adds CEO comment)
By James Herron
Of DOW JONES NEWSWIRES
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.
Company Web site: http://www.nationalgrid.com
-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@
dowjones.com
(END) Dow Jones Newswires
11-19-090337ET
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