Thames Water announced a disappointing set of half-year results, with the water services company seeing profits fall more than 60% as the business contends with the adverse weather conditions brought on by climate change.
Underlying pre-tax profits came in at just £43 million in the first half of the fiscal year, down from £116 million the company recorded in the same period last year.
The utilities company has also seen a 2.7% decrease in underlying revenues to a touch above £1 billion after the business was stung with around £40 million in fines levied at the water services provider last year that have since been brought forward.
‘2018 has challenged our resilience with two significant climate events in the space of just four months,’ Thames Water Chairman Ian Marchant said.
‘As climate change takes hold, we know these types of weather patterns will become even more frequent and we’re applying learnings from both our successes and our failures to better protect our customers from the threats of our unpredictable world.’
Thames Water weathered by climate change
‘With the Beast from the East and prolonged heatwave, 2018 has brought the threat and volatility of climate change into sharp focus, Thames Water CEO Steve Robinson said.
In the winter months, the impact of the freeze thaw affected 75,000 customers, with the company seeing a 34% year-on-year increase in the number of written complaints.
In March, the overnight thaw, after a sustained period of freezing conditions, caused pipes to crack, which led to a massive increase in the number of repair jobs that the company had to complete to reduce its overall leakage position.
‘We estimate our leakage would have been about 50Ml/d lower, if we hadn’t been affected by the weather events,’ Robinson added.
Challenging first half or Thames Water
The last six months have proved difficult for the water services company, with the company vowing to invest a further £1 billion this fiscal year deliver improvements to its services that will hopefully help the company bounce back in the second half of the year.
Shareholders have shown support for the management team by agreeing to three years without a dividend, followed by a further five years of a modest pay out of £20 million a year.
‘This dividend restraint will help increase our equity buffer and broaden financial resilience, which is something our customers have told us is important,’ Marchant said.