National Grid confident of strong performance

MIDLAND based utility National Grid has said it is well positioned for growth with operating profit significantly ahead of this time last year.

The power supplier said earnings per share were expected to be in line with the restated level of 2009/10, a move which would offset the impact of the rights issue it made last May.

The firm’s capital expenditure programme is predicted to total around £3.6bn for the full year, while it has been further boosted by the new rate order for its Niagara Mohawk Electric operation in the United States.

National Grid is also implementing a large restructuring and a $200m efficiency programme in the US, while it has also begun talks on UK price proposals for 2013.

Steve Holliday, National Grid chief executive, said: “I am pleased with the operational and financial performance of the business. We are positioned for a particularly strong year, driven by profit growth in our US business and a number of timing items.
 
“We are taking decisive action to restructure the US business to improve accountability, efficiency and productivity.
 
“In the UK, we are at the beginning of a two year process for resetting price controls for our UK Transmission and Gas Distribution businesses.  We remain confident of a positive outcome – that is, one which provides appropriate returns on our very significant investment programme.”
 
The firm said it was continuing to see strong operational and financial performance across all its businesses.  The strong momentum seen in the first half has continued and has further improved as a result of cold winter weather both in the UK and US.

However, it has warned these could be one-off events which may not occur next year.

Its US Gas Distribution business is performing particularly well this year with customer growth and income from new rate plans. It also said it was seeing an improved performance from its non-regulated businesses, with the third phase of its Grain LNG terminal commencing commercial operations in December, just in time to provide extra supplies for the peak winter period.
 
While it said increasing inflation may impact on the UK business during 2010/11, it would continue with its large capital investment programme.

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