National Grid plc (NGG) Q2 2023 Earnings Call Transcript

For the period ending September 30, 2022

November 10, 2022 4:45 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Nick Ashworth

Good morning and welcome to National Grid's Half Year Results Presentation. I'm Nick Ashworth, Head of Investor Relations and it's great to have so many of you on the call today.

Firstly, please, can I draw your attention to the cautionary statement at the front of the pack. As usual, a Q&A with John and Andy will follow the presentation. So please, can you join via the conference call to ask a question. All of today's materials are available on our website and for any further queries after the call, do feel free to reach out to me or one of the IR team.

So with that, I'd now like to hand you over to our CEO, John Pettigrew. John?

John Pettigrew

Thank you, Nick. Good morning, everyone and welcome to the call. As usual, I'm here with Andy Agg, our CFO. And following our presentations, we'll be very happy to take your questions.

The strong results we've announced today alongside our upgraded 5-year financial frame reflect the resilience of our business during some of the most turbulent and challenging economic conditions we've seen in years. Between April 2021 and March 2026, we now expect to invest up to £40 billion, up from the £30 billion to £35 billion we originally expected. Of this, £29 billion will support the decarbonization of our energy systems. This will deliver asset growth of 8% to 10% per annum, drive average underlying earnings per share growth of 6% to 8% per annum, whilst maintaining our strong balance sheet and attractive dividend.

Our investment in critical infrastructure is fundamental to the successful delivery of decarbonization, greater security supply and improved affordability for customers. And our focus on these areas is creating significant opportunities for us today and will drive our growth long into the future. In the near term, as we head into the winter, affordability is understandably front of mind. We've continued to progress our 3-year cost efficiency program, delivering a further £85 million of savings in the first half on top of the £140 million last year. This is helping us keep our parts of the bill as low as possible whilst delivering asset growth over the 3 years of around 30%.

At the same time, we've taken steps to help our most vulnerable customers who needs additional support right now. We've announced that we'll provide £65 million to families most in need of support in the U.K. and the U.S. to help them with their higher energy bills over the coming 2 winters. This is in addition to the accelerated return of £200 million of interconnected revenues that we announced back in May.