National Grid H1 Pre-tax Profit Climbs; Says FY10 Outlook Remains Strong

11/19/2009 5:53 AM ET

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(RTTNews) - National Grid Plc (NGG: News ,NG.L: News ), an electricity and gas distribution company with operations in the UK and U.S., reported Thursday a surge in pre-tax profit for the first half, reflecting higher one-time items as well as lower operating costs, despite a decline in revenues. Further, the company said its current performance remains in line with expectations, and that its outlook for the full year 2010 remains strong. Reflecting the positive outlook, the company's Board approved an 8% increase in the interim dividend.

Six-month total pre-tax profit climbed 67% to GBP 944 million from GBP 564 million in the prior year period. The latest first-half results included exceptional items, remeasurements and stranded cost recoveries of GBP 295 million, compared to prior year's GBP 6 million. Excluding items, pre-tax profit for the six months rose 16% to GBP 649 million from GBP 558 million a year ago.

On an after-tax basis, profit for the period attributable to equity shareholders of the parent increased to GBP 696 million from GBP 423 million in the year-ago period. Earnings per share were 28.1 pence, up from 16.7 pence in the previous year.

Excluding prior year's discontinued operations, profit increased 71% to GBP 696 million or 28.1 pence per share from last year's GBP 406 million or 16.1 pence per share.

Exceptional items, remeasurements and stranded cost recoveries after taxation were GBP 142 million in the period, compared to loss of GBP 25 million a year ago.

Adjusted earnings from continuing operations grew 29% to GBP 554 million or 22.4 pence per share from GBP 431 million or 17.1 pence per share in the previous year.

National Grid said it has made a very good start to what is expected to be a strong financial year, despite the prevailing economic conditions, which have marginally affected the company's distribution businesses particularly in the US.

First-half revenues, meanwhile, fell to GBP 6.04 billion from GBP 6.07 billion in the previous year. In UK, revenues grew to GBP 2.695 billion from prior year's GBP 2.666 billion, while US revenues fell to GBP 3.349 billion from GBP 3.406 billion a year ago.

Operating profit climbed 49% to GBP 1.40 billion from GBP 943 million last year, and adjusted operating profit was GBP 1.15 billion, up 6% from GBP 1.08 billion a year earlier, primarily driven by good results in its Transmission and Electricity Distribution and Generation businesses, partially offset by timing related items in US Gas Distribution business.