(Reuters) - Britain’s National Grid (NG.L) on Thursday estimated a hit of up to 1 billion pounds ($1.26 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 U.S. 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-pound 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% 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 Officer John Pettigrew said.
Its underlying operating profit rose 1% to 3.45 billion pounds in the year ended March 31, below analysts’ average estimate of 3.58 billion pounds, 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.
Reporting by Shanima A and Aby Jose Koilparambil in Bengaluru; Editing by Aditya Soni