Storms and abandoned nuclear projects take chunk out of National Grid profits

Profits fell by a third at National Grid last year it said a day after being thrown into the centre of a debate over nationalisation.

The figures

The FTSE 100 grid operator lost 31 per cent of its profit before tax, down to £1.84bn in the year ending March, it said this morning.

Read more: National Grid ends lengthy dispute with US unions

Stripping out, among other things, one-off charges and costs from major storms, underlying pre-tax profit fell three per cent to £2.47bn.

Earnings per share, on an underlying basis, rose five per cent to 58.9p. Revenues fell 19 per cent to £3.35bn. 

Why it’s interesting

The company said it had taken a £137m exceptional charge after Toshiba and Hitachi abandoned two nuclear plants during the year, putting a dent in the government’s energy plans.

It was propelled into the centre of a national debate yesterday as Labour revealed plans to bring the grid back into national ownership for less than the market price.

Labour said its plans would allow the government to make energy a human right and tackle climate change.

National Grid, which was privatised in 1990, yesterday called the plans “the last thing that is needed”, accusing Labour of wanting to return to a state-owned system from the 1970s. The plans were also criticised by energy suppliers.

National Grid has faced a turbulent year in the US where storms have battered its business.

The company took a $122m (£93m) hit to its results, down from $193m the year before, from a series of smaller storms, including unusual weather in April and May.

“These results from National Grid are released under the shadow of the Labour’s threat to take the company into public ownership,” said AJ Bell investment director Russ Mould.

“Whether or not the timing is coincidental, the company’s bosses may not be too displeased with the distraction, assuming Labour’s plan doesn’t come to fruition, as this is an underpowered set of numbers.”

What National Grid said

A day after Labour revealed its nationalisation plans, National Grid was keen to highlight its contributions to the UK.

Read more: National Grid gets shock from Ofgem plans

“We will continue to contribute to the important regulatory agenda in the UK and the US, to create value for shareholders, and play a central role in driving decarbonisation,” said chief executive John Pettigrew.

“Having delivered almost £640m of savings for UK customers over the last six years, efficiency remains a key focus as does continued investment, which will increase to almost £5 billion each year for the next two years.”