Macroeconomic challenges hit water company’s earnings
United Utilities first half revenues and operating profits have declined due to macroeconomic challenges hitting earnings.
Revenues for the six months to the end of September 2022 was down £13m to £919m, largely reflecting lower consumption ‘more than offsetting the allowed regulatory revenue increase.’
Operating profits for the period was also down by £74m to £258.5m. UU said this largely reflected the decrease in revenue and the combination of inflationary increases alongside the ‘impact of one-off incidents’ resulting from the dry summer weather.
CEO Steve Mogford said: “During what has been a difficult macro environment we have shown both operational and financial resilience. While we have not been immune to the impact of inflation, we are well placed compared to many as a result of our tight cost management, effective hedging strategy, and regulatory mechanisms providing further mitigation to rising costs.
“Our responsible, long term approach to investing and deployment of Systems Thinking is delivering sustainable improvements and creating long-term value for our stakeholders.”
He added: “We are improving water quality, have achieved our lowest ever level of sewer flooding, and are on track to meet our leakage reduction target.
“The Environment Agency has recognised our efforts again by awarding us the highest 4-star ranking for our performance in its latest assessment – the fifth time we have received this status in the last seven years.
“Storm overflows are a huge area of focus for us, and for the sector, and our Better Rivers, Better North West programme sets out a clear plan of action to reduce their use and improve the environment.
“It’s a big task but we are already making progress having reduced reported spills by 29% last year and making further progress this year.”