National Grid Transco NYSE: NGG raised its fiscal 2027 investment and earnings growth guidance after record first-half capital spending and one-off gains from its venture capital portfolio helped lift earnings.
The company said capital investment rose 32% to £6.7 billion in the first half and is now expected to reach approximately £13.5 billion for the full year. It also raised its forecast for full-year underlying earnings per share growth to 15%–16%, from a previous range of 13%–15%.
Underlying earnings per share increased 22% to £0.365, while underlying operating profit rose 13% to £2.6 billion. Chief Financial Officer Andy Agg said the operating profit increase reflected higher regulated revenues in the U.K. and U.S., as well as two one-off fair value gains at National Grid Partners. The company presented its results on an underlying basis and at constant currency.
The board declared an interim dividend of £0.1697 per share, up 3.8% from a year earlier.
U.K. Investment Drives First-Half Growth
Investment in U.K. electricity transmission increased 71% to £2.9 billion as National Grid accelerated work under the RIIO-T3 regulatory framework. The company said spending on its Accelerated Strategic Transmission Investment, or ASTI, program reached £1.5 billion in the period.
Underlying operating profit in U.K. transmission climbed 45% to £1.2 billion, as higher allowed revenues more than offset increased depreciation. U.K. electricity distribution investment rose 10% to £834 million, while the segment’s underlying operating profit was broadly unchanged at £550 million.
National Grid said all six of its Wave 1 ASTI projects are under construction. While it identified a 100-day schedule improvement for the delayed EGL 1 project, Yorkshire GREEN and EGL 2 were tracking ahead of schedule. The company also said it had secured all critical primary supply chain capacity for the ASTI program.
In the U.S., first-half investment increased 11% to £1.8 billion in New York and 14% to £1.1 billion in New England. New York underlying operating profit rose 9% to £487 million, while New England profit fell 10% to £266 million as higher costs, including a one-off provision, and depreciation more than offset revenue growth.
Joulent Funding and Project Kilby
National Grid invested £941 million in Joulent during the first half and expects to deploy the remainder of its £1.3 billion commitment in the coming months as the partners work toward a final investment decision on Project Kilby.
Most of the investment will support Kilby, a planned 2.7-gigawatt power facility for a co-located data center in West Texas. Management said a 50/50 joint venture with Chevron has been established, critical equipment has been secured and a 20-year power purchase agreement has been signed with Microsoft. First power is targeted for 2028.
Asked about protections if the project does not proceed, Agg said the investment is accounted for as a financial asset, reflecting protections around preferred distributions and the joint venture’s rights to equipment if particular contracts encounter problems. National Grid did not provide extensive contractual details.
Agg said National Grid expects returns from such investments to be higher than those from its regulated business, but that required returns would vary with each project’s risks. Management said the non-regulated portfolio would remain small relative to the regulated core.
Debt and Longer-Term Outlook
Cash generated from operations rose 14% to £4.1 billion. Net debt increased by £4.5 billion during the half to £48.6 billion, as capital spending, the Joulent investment, interest and dividends exceeded operating cash inflows. National Grid expects net debt to rise by a further £4 billion in the second half, including the remaining Joulent funding.
Agg said the company’s updated operating cash flow guidance reflected working-capital movements, higher expected interest charges and increased capital expenditure, rather than deterioration in underlying operating performance.
National Grid reaffirmed its plan to invest at least £70 billion through fiscal 2031, supporting approximately 10% annual asset growth and underlying earnings per share growth of 8%–10% a year from the fiscal 2026 baseline. Agg cautioned that annual earnings growth would not necessarily be linear, with the first year of RIIO-T3 expected to produce a larger step-up.
The company said faster supply chain delivery, including accelerated cable procurement for EGL 2, supported the higher fiscal 2027 spending forecast. Management said the progress strengthened confidence in the five-year plan but did not signal an increase to the longer-term investment guidance.
About National Grid Transco (NYSE:NGG)
National Grid plc, formerly known as National Grid Transco, is an energy infrastructure company that operates regulated electricity and gas networks. Its activities include transmitting electricity, distributing energy to homes and businesses, and transporting gas through pipeline systems.
The company serves customers in the United Kingdom and the northeastern United States. Its infrastructure connects energy producers with local distribution networks and end users, supporting the delivery of electricity and gas across these regions.
National Grid Transco was formed in 2002 through the merger of National Grid Group and Lattice Group, then changed its name to National Grid plc in 2005.
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