National Grid sees £400m Covid-19 hit but no long-term impact

National Grid said the Covid-19 crisis would have a £400m impact on results in the current year but that it expected no long-term material impact as it reported a 1% increase in annual profit.

Underlying operating profit for the year to the end of March rose to £3.45bn from £3.43bn a year earlier as revenue fell to £14.54bn from £14.93bn. Pretax profit at the power grid operator fell 5% to £1.75bn.

The FTSE 100 company declared a final dividend of 32p a share taking the annual payout to 48.57p a share - up 2.6% and in line with the company's policy.

National Grid set aside an extra £117m for US bad debts in response to the Covid-19 crisis in the year to the end of March and predicted a higher charge this year. In total Covid-19 will have a £400m impact in the current year but most of the shortfall will be recovered, it said.

John Pettigrew, National Grid's chief executive, said: "Whilst Covid-19 will impact our financial performance in FY21, we expect this to be largely recoverable over future years and therefore anticipate no material economic impact on the group in the long term."

National Grid said there would be some extra costs from Covid-19 in the UK but most of the impact would be in the US. Bad debts in the US will rise from the £117m additional charge last year. Bad debts above regulatory allowances will be recovered through future rate plans, it said. Lower revenue collections in the US should also be recoverable.

Lower energy usage will have a headline impact but almost all National Grid's revenues are decoupled from demand in the UK and US. Measures to support UK customers are repayable and recoverable, the company said.