Severn Trent suffers profit hit as pandemic hits water demand
Water company Severn Trent has posted a lower profit for the first half of the year, as the coronavirus hurt UK water consumption in the period.
The group, which serves millions of customers across the Midlands and Mid Wales, made a pre-tax profit of £126.5 million pounds for the six months ended September 30, down from £180.7 million a year earlier.
Underlying profit before interest and tax – one of the company's preferred metrics, which strips out exceptional items – declined 21 per cent to £225.6 million.
Turnover dropped 2.5 per cent to £887.6 million. Severn Trent said lower consumption, largely due to the coronavirus pandemic, reduced revenue by £33 million.
The company had anticipated a £50 million to £85 million revenue hit from the pandemic for the full fiscal year.
Operating costs are expected to be higher due to increasing chemical usage to meet tighter sewage rules and expected Covid-19 related increases in household bad debt, it added.
CEO Liv Garfield said: "The last six months have been challenging for everyone and I am grateful to our Severn Trent people, whether they’ve been in a treatment works, in an office, working from home, or out on the streets carrying out essential work, for the dedication, resilience and wonderful can-do spirit they have shown.
"It’s these qualities which have enabled us to provide our customers with a great service in such difficult circumstances.
"I’m incredibly proud of what we’ve achieved, whether it’s getting the top environmental performance grade once again from the Environment Agency, improving services for our customers, increasing our investment to help the country build back better, or taking a leading role in the Kickstart Scheme.
"We’ve done all of that while striving to do the right thing for all of our stakeholders, including mental health programmes, our support schemes for vulnerable customers, and through our £1 million emergency Covid-19 fund.”
