The company, which imposed a pipe ban from August to September amid the summer heatwave, said the increase in leaks and supply interruptions due to bursting of the network was the result of “hot weather and dry ground”. Thames Water has also come under fire over sewage discharges and executive pay, with its chief executive, Sarah Bentley, earning £2m. The company made a pre-tax loss of £386m in the half to the end of September last year, compared with this year’s profit of £493.5m. Thames Water, which supplies 15 million customers across London and the south east, said that exceptional gains in financial instruments contributed to the earnings growth. Ian Marchant, chairman of Thames Water, said: “2022 marked one of the worst droughts on record, leading to an unprecedented reduction in water storage. Given the severity and prolonged nature of the drought in our region, a temporary use ban has been put in place to help manage water resources. Team Thames is working around the clock to fix leaks and bursts, which have increased as a result of the drought, and is working with customers to help reduce demand.” The Guardian recently revealed how the water industry has taken on debts totaling £54bn since privatisation. Thames Water had a mountain of debt of £13.8bn, up from £12.6bn a year earlier. It declared no dividend after regulator Ofwat forced its shareholders to commit to injecting £1.5bn of equity capital. Shareholders include China’s sovereign wealth fund CIC, UK academic pension fund USS, BT Hermes pension scheme and Canadian and Australian investment giants. Thames Water reported a marginal rise in revenue to £1.13bn, but adjusted profits fell by £35m year-on-year as the company’s costs rose by almost £100m. Its total operating costs bill of £969m included a £33m year-on-year increase in electricity costs and a £24m rise in employment costs. The company said that since 2020 its energy costs had risen by 78% to £112m in the six months to the end of September. Bentley said: “In addition to the drought, huge increases in energy prices and significant inflationary pressures have had an impact on the business. As a regulated company, we have absorbed most of the increased costs, thus largely protecting our customers from this inflation. However, higher costs have affected our financial performance.” Thames Water said customer bad debt levels rose by £1m to £36m as the percentage of cash collections fell. However, the company pointed out that the bad debt charge applies “mainly to those who choose not to pay their bill despite being financially able”, as well as those who cannot afford to pay. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Thames Water said it had provided £38 million in financial support to customers through its WaterHelp social tariffs and WaterSure schemes, with 280,000 households receiving a 50% reduction in their bill over the past six months. The Reading-based company’s earnings figures were flattered by a £580m profit on the return on around £11bn it has invested in financial derivatives. The company, which would have reported a loss of £44m without the boost, said its investments paid off significantly due to higher interest rate expectations and the fall in the value of the pound against currencies including the dollar and euro over the past two years.
