Thames Water Utilities Limited Consolidated Interim Financial Statements (2988U)

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RNS Number : 2988U

Thames Water Utilities Limited

02 December 2021

Thames Water Utilities Limited announces half year results for the six months ended 30 September 2021

Improving performance in a challenging environment

-- Turnaround plan launched - focused on fixing the basics, raising the bar and shaping the future

-- New, experienced, 'frontline first' focused executive team in place to lead the turnaround in performance and meet our customer and environmental responsibilities

   --    Improving trends in water quality, complaints management and supply interruptions performance 

-- Improved operating profit, driven by growth in allowed revenue and partial recovery of non-household consumption

-- Higher reported losses reflecting increases in deferred tax and non-cash losses on financial instruments

-- Significantly increased investment in our network as we ramp up our AMP7 capital delivery programme

-- Shareholders have approved an additional GBP300 million contribution towards future investment to accelerate improvements to London's network

-- Planned GBP1.2 billion investment underway in sewage treatment works between 2020 and 2025 to improve the health of our rivers

Sarah Bentley, Thames Water CEO, said:

"We launched our turnaround plan in March this year. It stretches over eight years and will transform our company from an underperformer to join the rest of our industry. From there, we will have the opportunity to lead the way in delivering excellent customer service and generating public value.

"It's been a challenging six months, with the ongoing Covid-19 pandemic, extreme weather, increasing power costs and the fuel crisis having a big impact on the running of our essential service. That said, we've kept taps running and sewers flowing thanks to our brilliant key workers who've shown relentless dedication and resilience.

"We've also continued to help those households and businesses finding themselves in difficult financial circumstances as a result of the pandemic.

"We know we have a long way to go to deliver the performance our customers and stakeholders rightly expect of us, but we've started the journey guided by our purpose to deliver life's essential service so our customers, communities and the environment can thrive. We are seeing early signs of progress and are excited by our vision to build a better future and leave a positive legacy for future generations."

To read the full report visit: www.thameswater.co.uk/ourresults

Improved operational performance

We have taken the first steps in our journey to turnaround Thames Water and build a better future for us all.

-- Reduced customer enquiry backlogs, improved resolution times and implemented a major change programme aimed at transforming customer service

   --    Increased use of our online customer platform as we improve our online experience 
   --    Improved water quality and supply interruptions over the past six months 

-- Reduced total pollution incidents year on year, but behind plan on reduction of serious pollutions, sewer flooding and blockages

-- Drained our Queen Elizabeth II (QEII) reservoir to carry out inspections and essential maintenance work. This included relining the tunnels to the reservoir, which serves 10% of London's water, so we can make sure our water supply is resilient

-- Completed the construction of our test rig for our largest water mains at Kempton in August, allowing us to test pipes in different conditions, without risk to our essential services

-- Completed a GBP20 million project to refurbish our Gateway desalination plant at Beckton, enabling us to supply extra water to London during periods of severe drought

Financial performance

Higher revenue and EBITDA in the first half of 2021/22 has been offset by an increase in one-off, non-cash items, resulting in an increase in reported losses.

   --    Underlying revenue of GBP1.1 billion, up 7% on the prior period 
   --    Underlying EBITDA up 10% to GBP548 million 

-- Underlying loss after tax of GBP616 million driven by a non-cash loss on financial instruments and a one-off deferred tax charge due to the increase in corporation tax rate to 25%

-- Invested over GBP625 million in our network in the first six months of the financial year, with c.GBP20 billion invested over the last 20 years to better serve our customers

Effects of climate change and flooding

It has been devastating to see the impact of extreme weather and flash flooding on people's homes and livelihoods across our region during the last few months. Our focus is on:

-- Working hard with other organisations responsible for drainage, so we can join forces to make bigger improvements long-term for people living in our region

-- Continuing to invest in our infrastructure to increase capacity and make our network more resilient as climate change has an increasing impact on our operations and the environment in which we operate

Supporting our customers, communities and the environment

We are committed to making a real difference to people's lives in our region.

-- Increased the number of customers on our Priority Services Register, which helps us provide extra support during emergencies, to over 270,000 customers (up 37% since 31 March 2021)

-- Signed up almost 2,000 new customers to our customer assistance fund, which helps those with water debt by matching payments, and placed over 240,000 customers on our social tariffs to date

-- Accelerating the pace of our new Ventures division to address the way our energy is created and used

-- Awarded more than GBP6 million as part of the Ofwat innovation fund to help decarbonise wastewater treatment

-- Taken a progressive stance on river health - it is unacceptable for any sewage to enter rivers, from both a public health and environmental perspective

-- Providing GBP500,000 to the Greater London Authority's 'Grow Back Greener' fund, which will provide grants to improve green spaces in London

-- Launched our apprenticeship programme internally, so existing employees can develop their skills and gain qualifications on the job, and launched our shared apprenticeship scheme that will enable us to share skills and talent with our supply chain

-- Supported the 10,000 Black Interns programme and Business in the Community Young Black Men Project

-- Recognised by Institute of Water for "Outstanding Commitment to Diversity & Inclusion in the Water Industry 2021"

About Thames Water

Thames Water is the UK's biggest water and wastewater services provider. Our key workers provide essential services around the clock to 15 million customers across London, the Thames Valley and surrounding areas.

For an average of just over GBP1 a day for our households, we provide 2.6 billion litres of drinking water and safely remove 4.7 billion litres of wastewater every day.

We invested more than GBP1 billion again in 2020/21, leading to a total of GBP20 billion in the past 20 years, and we will continue to spend wisely on improving resilience, service and efficiency, as well as provide more support for customers in vulnerable circumstances.

We also have additional responsibilities to society and the natural environment. What we do and how we do it delivers significant public value, which is why we have ambitious plans to self-generate more of our own power, reduce our carbon emissions and increase biodiversity across our sites.

ENDS

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December 02, 2021 02:00 ET (07:00 GMT)