By Christian Moess Laursen
United Utilities, a leading water company in northwest England, has announced a significant drop in pretax profit for the first half of fiscal year 2024. The decrease can be attributed to lower operating profit and increased finance costs. Despite these challenges, the company remains committed to achieving its targets for the current regulatory period, known as AMP7.
In the six months ended September 30, pretax profit plummeted to £160.0 million ($198.7 million), down from £426.3 million in the same period last year. This decline was primarily driven by a substantial rise in net finance expenses, which amounted to £216 million.
On a positive note, revenue increased to £982.0 million, compared to £919.3 million in the previous year. This growth is attributed to the allowance of inflation increases within United Utilities’ revenue cap. However, operating profit experienced a decline, dropping from £285.5 million to £240.6 million. The decrease is mainly due to costs associated with a fractured outlet pipe at the Fleetwood Wastewater Treatment Works.
Earnings per share took a hit as well, plunging from 51.6 pence to 17.1 pence.
Despite the challenging financial results, United Utilities has declared an interim dividend of 16.59 pence per share. This reflects the company’s commitment to its AMP7 policy and represents an increase from the previous interim dividend of 15.17 pence.
Looking ahead, United Utilities remains confident in its fiscal 2024 outlook and is determined to meet its targets for the current regulatory period, which extends until April 1, 2025.