National Grid plc (NYSE: NGG) stock fell after the company’s vital energy infrastructure got affected by one-off factors, that includes having to write off funds spent to connect two planned new nuclear power stations in the UK that were finally got cancelled. The company’s pre-tax profit for the year to March, declined by 31% to £1.8bn due to higher costs. Earnings were also affected due to a seven-month labour dispute in the US state of Massachusetts, which was resolved in January, as well as restructuring programmes at its US and UK businesses. The company has posted the profit before tax of 1.84 billion pounds ($2.37 billion) in the year ended March 31, compared with GBP2.66 billion the year before. The company’s revenue for the year fell to GBP14.93 billion from GBP15.25 billion in fiscal 2018.
On an underlying basis, which strips out exceptional costs and other factors such as the costs of dealing with major storms, pre-tax profit for the 12 months that ended March 31 was down 3 per cent to £2.5bn, which was slightly ahead of analysts’ expectations.
The board declared a final dividend of 31.26 pence a share, bringing the total year’s payout to 47.34 pence, this compares with 45.93 pence last year.
The company said it will focus on continued investments, which it said will rise to almost GBP5 billion a year for the next two years. National Grid said it is on track for asset growth at the top end of its 5% to 7% range in the medium term.
Meanwhile, the company, that operates the high voltage electricity transmission system in the UK and ensures demand is balanced with supply, said that the company was forced to write off £137m of development costs regarding to connecting planned new nuclear plants in Cumbria and Wales, which were both scrapped last year. National Grid and other owners of gas and electricity networks in the UK are facing a crackdown from the UK energy regulator Ofgem in their allowed returns to investors.
Additionally, the company has made “significant” progress on cross-border cables, or interconnectors. The company has put the high-voltage lines at the heart of its growth strategy and is continuing with projects that are already underway, which will amount to a 2 billion-pound ($2.6 billion) investment in cables to France, Norway and Denmark.