First half earnings at FTSE 100 utility giant National Grid have failed to spark after profits fell by almost two-thirds, though the group is on track to sell its UK gas distribution arm and is making progress with its US activities.
The utility's profit before tax fell 64 per cent to £485m in the six months to 30 September, down from £1.35bn in the same period of last year. This was mainly down to exceptional items, including a £700m charge related to the sale of its gas distribution business.
Operating profit fell three per cent to £1.79bn, though adjusted operating profit rose one per cent to £1.85bn, split between £1.26bn in the UK and £435m in the US, where it provides New York, Rhode Island and Massachusetts with natural gas and electricity.
The FTSE 100 group said new rates for Massachusetts Electric allowed a return on equity of 9.9 per cent, and a three year joint proposal was filed for the downstate New York gas businesses in the period.
Earnings per share more than halved to 13.4p per share, down from 27.7p per share last year, while the group's interim dividend per share reached 15.17p, in line with its policy.
National Grid's share price was up 0.15 per cent to 1,007p in early morning trading.
Why it's interesting
National Grid has increased its capital investment by 12 per cent to £2.15bn in its total business, split between £970m in the UK and more than £1bn in the US.
Over the past six months, National Grid has raised more than £4.5bn of new long-term financing in the capital markets for both its UK and US businesses.
National Grid Gas Finance, the financing company for the new UK gas distribution business, issued a record breaking £3bn sterling bond across four tranches in September, as well as a €750m euro-bond.
What National Grid said
Chief executive John Pettigrew said:
First half earnings per share were in line with a strong prior year, with our regulated businesses delivering a solid performance.
Looking further out we are focused on evolving National Grid to enable us to play a leading role in shaping the future of energy networks.