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S&P cuts Scotland Gas, Southern Gas
S&P said it downgraded Scotland Gas Networks plc and Southern Gas Networks plc to BBB from BBB+, citing actions by their regulator that will eat into their returns.
The decision will reduce EBITDA from Scotia's regulated networks by about £50 million-£60 million per year.
“We anticipate that Scotia's financial metrics will weaken due to reduced profitability combined with the sustained capital expenditure (capex) plan. While the group has lodged appeals against Ofgem's final price determinations with the Competition and Markets Authority (CMA), we do not believe that the potential upside of these appeals could sufficiently offset the impact of the new regulatory period,” S&P said in a press release.
The outlook is stable.
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