National Grid’s operating profit was £4,096m in 2015-16, up £233m (up 6%) compared with the previous year at actual exchange rates, according to the firm’s annual results. The company said that its interconnector with France had helped boost it’s earnings for the year, thanks to cheap French electricity crossing the channel. Movement in exchange rates had boosted operating profits by £73m and that on a constant currency basis, operating profit up by a more modest 4 per cent (£160m), the company said.
Morgan Stanley’s European utilities team said the results were in line with expectations: “National Grid reported solid results with asset growth and achieved return on expenditures broadly in line with our forecasts. We see little to change our near term forecasts. Progress on US rate cases will be key to improve US returns. The gas distribution disposal is on track.”
The group’s chief executive, John Pettigrew, said: “Today’s strong financial and operational results reflect the focus and commitment of Steve Holliday’s leadership over the last nine years, and I am delighted to be the CEO of a business that is in such good shape. In 2015-16, alongside the strong performance, we also made good progress with important rate filings in the US, and the start of a process to sell a majority interest in the UK Gas Distribution business, which is expected to complete in early 2017. The needs of our customers remain at the centre of our business, demonstrated by the significant investment in critical infrastructure in the UK and the US, and over £330 million of savings generated for customers in the UK in the last three years. We are well positioned to deliver asset growth in 2016-17 and beyond. We will continue to enhance efficiency across the Group to deliver an outstanding and affordable service to our customers. At the same time, National Grid will continue to adapt to the new trends in the energy sector, to ensure we keep delivering value for shareholders.”