Northumbrian Water's profits down but earnings rise

Jun 3 2009 By Karen Dent, The Journal

HIGHER prices have boosted Northumbrian Water’s earnings but the utility giant says increased power costs and a 1% dip in demand are behind a fall its annual profits.

The Durham firm, which also runs Essex & Suffolk Water, said its pre-tax profits fell by 10.3% to £152.7m in the year to the end of March as it was hit by a 50% increase in energy prices.

There was an over all 1% drop in demand for its services while recession-hit industrial customers cut their volumes by 4%.

But the company, which is wants to raise household water bills by around £25 a year, saw annual revenues rise to £694.1m from £670.4m the year before after its charges went up by the same rate as inflation.

Managing director John Cuthbert said: “The group has produced good financial and operating results against a difficult economic background.

“Energy prices continue to be volatile and, despite managed reductions in demand, have increased operating costs in the year.”

Northumbrian, which invested £228.9m in improvements including a better sewer flooding programme and its anerobic digestion plant at Bran Sands in Middlesbrough which uses sludge to produce electricity, wants to raise bills by 3.4% a year over the rate of inflation for five years to pay for further improvements.

If the plan is approved by water watchdog Ofwat, domestic bills in the North East would increase from the current average of £297 a year to £322 in 2014/15.

Northumbrian wants its 2.6 million North East customers to pay an average of 41p a day for water and 48p a day for sewerage services. Essex & Suffolk customers, who just receive water, would pay 53p a day.