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National Grid posts £4bn profits as it cashes in on energy crisis

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·Finance Reporter, Yahoo Finance UK
·2-min read
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National Grid has posted a sharp jump in profits.
National Grid has posted a sharp jump in profits. Photo: Sean Gallup/Getty Images

National Grid (NG.L) has reported a sharp jump in profits as it cashes in on energy market turmoil.

The company, which runs Britain's energy systems, announced its underlying operating profit was up 11% to £4bn, helped by higher prices of gas and electricity.

John Pettigrew, who runs the grid giant, said the firm wants to balance this with keeping bills down for customers.

“Of course we are going to try to do that as efficiently as possible to keep bills down for customers.”

The energy distributor said rising inflation and a cost of living crisis posed a "significant" challenge.

Read more: Rishi Sunak's 'economic storm' warning prompts louder calls for emergency budget

"The world has changed dramatically over the last year, with the tragic war in Ukraine, a global economic slowdown, and rapidly rising inflation," Pettigrew said.

"The UK and US communities we serve are facing significant cost of living challenges."

Households in the UK are being hit with rising costs when it comes to fuel, energy and food, as inflation reaches a record high in the country

UK inflation jumped to 9% in the 12 months to April, up from 7% in March and the highest level it has reached since 1982.
UK inflation jumped to 9% in the 12 months to April, up from 7% in March and the highest level it has reached since 1982.

There are growing calls for a windfall tax on energy companies as UK households grapple with surging bills and a sharp fall in living standards.

Chancellor Rishi Sunak has said "no option was off the table" if energy firms did not invest in the UK. But the government has not yet given its support to the move, with Boris Johnson previously saying it would hamper investment and keep oil prices higher over the long term.

The company expects earnings for 2022/23 to be broadly flat on the reported figures and said it maintains its financial outlook over the five-year period to 2025/26.

Read more: FTSE 100 extends losses as Wall Street suffers biggest sell off since 2020

AJ Bell investment director Russ Mould, said: “A business which continues to perform strongly is gas and electricity network National Grid with a big increase in underlying profit to £4 billion. What’s impressive or notable about this is it has been achieved despite record levels of investment as the company looks to support the transition away from fossil fuels.

“National Grid is less exposed to surging energy prices than some of its peers in the utility sector though as it is paid for providing capacity in the network rather than based on the price or volume of the power used, though its revenue is linked to inflation."

Still, its share price dropped 1% to 1,224 pence.

The recommended final dividend to bring full year dividend to 50.97p, up 3.7% and in line with policy.

Watch: Why are gas prices rising

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