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FTSE 100: National Grid profits surge 50% leading it to lift earnings guidance

National Grid: Electricity pylons
National Grid expects full-year underlying earnings per share growth to be in the middle of its new 6% to 8% compound annual growth rate forecast. Photo: Arnd Wiegmann/Reuters

National Grid (NG.L) saw its operating profit jump 50% to £2.1bn in the six months to September, thanks to higher revenues from its new distribution network assets in the UK.

Here are some of the important figures announced today:

Earnings per share: Rose to 32.4p in the first half

Operating profit: Up 50% to £2.1bn

Infrastructure investment: Up to £40bn, ahead of previous range

Interim dividend: Was 4% at 17.84 per share

The utility firm, which runs Britain's energy systems and also has businesses in the US, raised its full-year earnings growth forecast.

It now expects full-year underlying earnings per share growth to be in the middle of its new 6% to 8% compound annual growth rate forecast.

The company added that it expects to invest up to £40bn on critical infrastructure between 2022 and 2026, with a strong focus on decarbonisation of energy networks. This is up from a previous range of £30bn to £35bn.

Following its takeover of Western Power Distribution, the largest power distribution company in the UK, as well as the sale of a power company in Rhode Island, National Grid said its earnings per share for the first half rose to 32.4p.

The interim dividend was 4% higher at 17.84p a share, while a strong US dollar also boosted the company's US assets.

National Grid now faces a higher interest rate environment after years of borrowing cheaply to invest in its swathes of assets.

The stock was up 0.7% in London on the back of the news.

Read more: UK job growth falls as recession fears mount

John Pettigrew, the company’s chief executive, said National Grid was playing its part mitigating the affordability challenges of customers, having achieved £225m of operating cost efficiency savings.

“We have achieved £225m of operating cost efficiency savings to date, and this is enabling us to mitigate some inflationary pressures on both the business and our customers.”

“However, ensuring security of supply and affordability, while delivering net zero goals, can only be achieved with clear and stable regulatory frameworks that incentivise the timely delivery of the investment required," he said.

"We remain committed to working with governments and regulators to achieve this as we focus on delivering a clean, fair and affordable future for all."

It came as Centrica (CNA.L), which owns British Gas, separately announced that its profits will be ahead of expectations this year amid a sharp cost of living crisis hitting consumers.

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