The company pleaded guilty to four counts of supplying water unfit for human consumption and one count of failure to adequately operate a treatment process.
Bournemouth Magistrates ordered the company to pay a £85,000 fine, £48,772 towards prosecution costs, and a £120 victim surcharge.
The case related to an outbreak of the cryptosporidium parasite – which can cause gastrointestinal illness – discovered in the treated drinking water at the Alderney water treatment works in May 2013.
Chief inspector of the Drinking Water Inspectorate Jeni Colbourne said: “This was a serious failure by the company which has been duly recognised by the court.
“Consumers can be reassured that the Inspectorate has required the company to make changes to ensure this will not happen again”.
Speaking to Utility Week after the case, Sembcorp Bournemouth Water managing director Roger Harrington said: “The first thing I want to say is that we are desperately sorry that any water we supplied in spring 2013 cases of cryptosporidium in our community and we are particularly sorry for the distress and suffering for people suffering with the illness.”
He added that within months the outbreak, the company invested in a £3.5 million ultraviolet plant at its Alderney water treatment works.
Harrington added he will personally apologise to the individual customers affected by the parasite and offer them compensation. “We owe them an apology; that’s only fair,” he said.