Glas Cymru reports pre tax loss as cost hikes hit Welsh Water
Welsh Water’s holding company Glas Cymru reported an underlying pre tax loss of £35.9m for the year to 31 March 2017 after increases in operational and finance costs took their toll.
Revenue was virtually unchanged over the previous year at £743.6m. Operational costs were up 5% to £312.6m. They included a £12m increase in infrastructure renewals expenditure to £69.7m and a near £10m hike in depreciation and amortisation along with a £20m exceptional tax refund which left operating profit down 35% year-on year at £104.7m.
The company reported a pre tax loss of £98.9m following a £77m profit in the previous year. The latest figures included a swing in fair gains from derivatives from £39m in 2015-16 to a loss of £63m in the report year and a £15.5m increase in finance costs. Underlying performance adjusted for fair value movements in derivatives was a pre tax loss of £35.9m following a £17m profit in 2015-16.
Operating cost increases included rising maintenance contract rates, energy prices and ICT contract transition costs. They were offset in part by greater operating efficiencies and higher income from energy production and improvements in debt collection.
Bad debt in the report year was reduced 15% from the previous year to £23m. The company said it had focused on debt owed by customers who refused to pay rather than those who could not pay by securing charging orders over debtors’ property. It had secured some 2,500 orders over £6m of customer debt.