Water company Pennon Group swung to a pretax loss in 2023 due to rising costs as the water industry faces pressure to clean up its act .
The owner of South West Water reported a pretax loss of £8.5m, swung from a profit of £127.7m last year as costs increased by over £100m in the period.
FTSE 250 Pennon said the extremely hot weather in the second half of the year as well as sharply higher energy prices contributed to the increase in costs.
Susan Davy, chief executive, commented: “This has been an extraordinary year for Pennon in which extreme weather patterns have tested our operational resilience. At the same time, inflationary pressures have proven our financial resilience. We have been able to respond to both”.
Water companies have been under intense pressure from politicians to stop polluting rivers and oceans while still paying out huge dividends.
Regulators have not escaped public ire either. Earlier this week it was revealed the Environment Agency fined just four companies for breaching ‘storm overflow’ permits despite over 300,000 sewage spills taking place.
Pennon however said it had made progress on its environmental targets, reporting a 50 per cent decrease in pollution incidents since 2020 with around 30 per cent of that delivered in 2022.
It also reported a 30 per cent reduction in storm overflow use in the year. Water companies have to report a 50 per cent reduction by 2025.
For the second year running it achieved 100 per cent bathing water quality. The firm said “no other water company has as many high-quality bathing waters in their area”.
“In a year in which the sector has been rightly challenged to clean up its act, we have delivered improvements in environmental performance,” Davy said.