National Grid warns of £1bn cashflow hit as US bad debts rise
Company operates gas franchise in New York City, Long Island as well as running Britain’s energy system
Britain’s National Grid on Thursday estimated a hit of up to £1 billion (€1.1 billion) to this year’s cash flow as Covid-19 lockdowns reduce industrial and commercial power usage and it prepares for a rise in bad debts in its US operations.
The company, which operates a gas franchise in New York City and Long Island and runs Britain’s energy system, also said in a statement it expects a £400 million hit to its 2021 fiscal underlying operating profit, with estimated lower customer revenue collections in the United States.
National Grid, however, said it does not expect any material impact in the long term from the pandemic, adding that it continues to target asset growth of 5-7 per cent in the near term.
“Whilst Covid-19 will impact our financial performance in FY21, we expect this to be largely recoverable over future years,” chief executive John Pettigrew said.
Its underlying operating profit rose 1 per cent to £3.45 billion in the year ended March 31st, below analysts’ average estimate of £3.58 billion, according to IBES data from Refinitiv.
Operating costs were higher during the coronavirus crisis due to increased spending on cleaning and health screening, it said.
The company proposed a final dividend of 32 pence per ordinary share, in line with its payout policy. – Reuters