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Investing.com — National Grid PLC (LON:NG) has raised its income guidance for its 2022/23 fiscal year and unveiled plans to spend more on its transition to a renewable energy infrastructure, as the British utility service posted better than expected half-year operating profit.
In a statement, the London-based group said it now expects to see full-year underlying earnings per share grow “in the middle” of its new 6% – 8% range, assuming an average sterling-to-dollar exchange rate of £1 to $1.20. It previously anticipated a jump in the 5% – 7% band.
National Grid is also now aiming to spend £40 billion (£1 = $1.1370) in total cumulative capital investment in critical infrastructure over the five-year period to 2025/26, up from its prior outlook of £30B – £35B. The company said this decision stemmed from “macroeconomic moves” over the past six months, including foreign exchange rate changes, soaring inflation, and rising interest rates.
Chief executive officer John Pettigrew added that £29B of that investment will go directly towards efforts to decarbonize energy networks.
The moves come after National Grid posted a 50% surge in underlying earnings before interest and taxes to about £2.12B in the six-month period ended on September 30. Analysts polled by the firm had anticipated that the figure would come in at £2.02B.
Earnings per share ticked up to 32.4 pence, also beating estimates.
Driving this increase was an inflation-driven rise in sales at National Grid’s distribution network assets, along with proceeds from the sale of a power company in the U.S. state of Rhode Island.
Shares in National Grid edged higher in early trading on Thursday.
