National Grid PLC (LSE:NG.) raised its full-year profit forecast as it expects the early commissioning of the new interconnector between Britain and Norway to boost its results.
The power network operator said it now expects underlying EPS for the current fiscal year to be “significantly above” the top end of its 5%-7% forecast range.
“This is primarily driven by early commissioning of our new NSL interconnector, coupled with higher auction prices across our interconnector portfolio, which is expected to deliver around £100mln higher operating profit,” the company said in its interim earnings release.
National Grid has invested £620mln in the 1,400MW North Sea Link (NSL) to Norway, which began operating in October.
The company reported a surge in profits for the six months to 30 September 2021, driven by the first six months of operations of the IFA2 interconnector between the UK and France, reduced impact from COVID-19 compared to last year and higher UK Electricity Transmission net revenue.
Pre-tax profit in the first six months to 30 September 2021 came in at 1.08bn, a rise of 86% compared with the same period last year, while underlying operating profit increased by 47% to £1.4bn.
National Grid increased its interim dividend to 17.21p per share from 17p.
The group said it expects to invest £30bn-£35bn in its energy networks and adjacent businesses over the five-year period to 2025/26.
In the UK, it plans to invest £8bn in electricity transmission for asset health, anticipatory system reinforcement to facilitate offshore generation and other new onshore system connections.
Shares rose 0.67% to 981.50p in midmorning trade.