Jun 18, 2020

National Grid safeguards dividend despite coronavirus knock to profit

National Grid has warned of a £400m coronavirus hit to its underlying operating profit this year as its US business suffers particularly badly, but maintained its dividend despite the crisis. The company said the US operation, which now makes up half its business, faced rising bad debts as customers struggle to pay their bills and higher costs to keep electricity and gas flowing. The pandemic knocked National Grid's earnings for its last full financial year, which ended on March 31, as it booked a £117m provision for rising bad debts in the US. Underlying operating profit inched up 1 per cent to £3.5bn, about 3 per cent below analysts' forecasts, while statutory pre-tax profits, which take into account exceptional costs, fell 5 per cent to £1.75bn. Shares were marginally down, by 0.70 per cent, in early trading in London on Thursday as National Grid became the latest UK company to stick to shareholder payouts despite higher costs from the pandemic. It recommended a full-year dividend of 48.57p, up 2.6 per cent. Extra costs have been incurred as National Grid has been forced to pay wind farms and even a nuclear power plant to reduce output to cope with lower demand.

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