The UK's largest energy utility, National Grid (NG), expects the costs from 'Superstorm' Sandy, outside the Long Island Power Authority (LIPA) area, to be below £100m in the second half of the financial year, although these will be recoverable in future years through rate increases.
However, management warned that activities to restore power in the Long Island area, which suffered from extensive flooding, have been significant, adding that in comparison with Hurricane Irene last year, which cost around $175m (£109m), two and a half times the number of crews are out and for a longer periods. There is also legal action pending against LIPA and National Grid over their handling of the storm, but chief executive Steve Holliday defended his company, stating: "Our teams in the US responded in a timely, safe and effective way to restore service to our customers and limit disruption".
In the first half, the group's underlying operating profits, excluding one-off costs associated with the storm and payment timing, were up 21 per cent to £1.15bn. The board maintained a 4 per cent increase in the half-year dividend ahead of a key UK regulatory ruling on 17 December which will dictate allowed returns for two-thirds of the business over the next eight years. Investment in US and UK networks increased 23 per cent to £1.8bn.
Analysts at Deutsche Bank forecast full-year pre-tax profits of £2.88bn and EPS of 55.9p (from £2.59bn and 51p in 2011).
NATIONAL GRID (NG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 684p | MARKET VALUE: | £24.9bn | |
| TOUCH: | 683.5-684.5p | 12-MONTH HIGH: | 714p | LOW: 590p |
| DIVIDEND YIELD: | 5.5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 251p* | NET DEBT: | 224% | |
| Half-year to 30 Sep | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 6.31 | 0.94 | 21.9 | 13.9 |
| 2012 | 6.08 | 1.29 | 28.8 | 14.5 |
| % change | -4 | +37 | +32 | +4 |
Ex-div: 28 Nov Payment: 16 Jan *Includes intangible assets of £5.3bn, or 146p a share | ||||
