Thames Water has reported a 6.5 per cent year-on-year drop in revenue – to £996 million – for the first half of 2020/21.
The £69 million fall in revenue related to lower allowed revenues in AMP7 compared to AMP6 and reduced water consumption in the non-household market because of lockdown.
The company made a pre-tax loss of £246.5 million for the six months to 30 September, compared to £13.9 million for the same period last year. It stressed that this was a non-cash loss, principally related to a £355.8 million fair value loss on financial instruments.
Operating profit decreased by £118.7 million to £222.9 million, due to decreases in revenue and other operating income, as well as increases in operating expenditure.
Decreased consumption was partly offset by an increase in household revenue from more people spending time at home and the hot, dry summer.
Bad debt rose by £7.5 million to £34.9 million in the first half of the financial year primarily due to the cash collections being hampered by the pandemic.
Chief financial officer Brandon Rennet said the company had focused on managing its cost base. The business saw delays to its capex programme and anticipates overall investment will be materially lowered than expected for the year.
He added the company has “maintained a regular and open dialogue” with investors and “appreciated their attention and support”.
The company said it has significant liquidity to cover approximately two years of business and refinancing requirements.
No dividends were paid to shareholders in the company or parent company, Kemble Water Holdings.
Statutory debt increased by £137.7 million to just under £12.3 billion. Overall gearing at 30 September was 83.6 per cent, below the Ofwat mandated maximum of 95 per cent. Rennet said gearing reflects the end of AMP6 adjustment to regulatory capital value (RCV) and is higher than anticipated due to lower than expected outturn for inflation in PR14.