The Beast from the East and the prolonged summer heatwave have delayed Thames Water’s progress on leakage, despite its “best repair performance” in ten years.
The extreme weather contributed to Thames Water’s half-year profits falling by 69 per cent to £67.7 million for the six months to 30 September 2018 from £218.5 million for the same period last year.
Thames Water’s chief executive Steve Robertson told Utility Week that the challenges posed by extreme weather “is absolutely a wake-up call” for water companies and wider society.
He said events such as the freeze-thaw and the heatwave “signals a new reality” which will require water companies to think of “new and better ways” to address issues such as leakage.
“The Beast from the East and the long summer were the worst incidents in the history of Thames Water,” he claimed.
Despite the ongoing impact of the severe cold spell on the company’s leakage performance he said a “few good things” had come out of it including the “accelerated focus on climate change”.
While profits fell, the amount of water lost through leakage increased to 683 megalitres a day compared to 665 Ml in 2017.
The company said it fixed 1,431 leaks per week, up 37 per cent year-on-year and its best performance since 2008/9.
Robertson said Thames Water is “fixing leaks more efficiently than ever before” but the challenge is finding where the big leaks are as most of them are below ground. “It will take muscle and brain,” he said.
Thames has installed 26,987 leak-detecting acoustic loggers to date and a further 44,105 smart enabled water meters, which can help pinpoint leaks.
In the company’s interim results published today (6 December), it also revealed that supply interruptions and complaint volumes were also affected by climate events. Written complaints from customers increased from 8,242 in September 2017 to 11,083 this year.
Robertson said Thames Water has increased its overall headcount by 600 with around half of these employees dealing with the fallout issues from the severe weather.
Without the enduring problems from the weather events he said that the company would have been on track for its end of AMP leakage target.
“I’m still pretty confident we will meet it but I’m not an idiot and know if we have a bad winter followed by another extended dry period it will be hard to meet the target,” he said.
Robertson described the financial results as a “punctuation mark of an ongoing story”.
He said the company still has more to do for its transformation and “fundamental repositioning of the business”, adding “there is no end point to the journey”. “You can expect to see more change inside the business,” he told Utility Week.
In a statement published alongside the interim results, Robertson said: “Our profit decreased over the period as we brought forward regulatory penalties, to benefit customers, and hired more employees to improve customer service and tackle leakage. Our capital investment increased, with £554 million spent on improving our water and waste networks.
“Our long-term investors are committed to the high investment levels required to face the challenges created by climate change and population growth and continue to not take any dividends.
“Our record £11.7 billion business plan for 2020-25 will help to further transform our infrastructure and customer service, as well as provide the necessary extra support for people in vulnerable circumstances.”