Anglian pre tax profit slides 93% as costs and depreciation take their toll
Anglian Water reported a 93% slide year-on-year in underlying profits before tax to £6m for the year to 31 March 2018 following increases in underlying finance costs, depreciation and operating costs.
Revenue for the period was up 1.8% to £1.25bn reflecting tariff increases and a “modest” increase in customer numbers.
A £15.7m hike in operating costs was fuelled largely by interest rate increases of £13.7m and added costs of £12.5m from replacing capital projects with more efficient operational measures. This, coupled with a 7.8% rise in depreciation to £335.5m following commissioning of new assets shaved operating profit 4.6% to £348.5m.
Underlying net finance costs excluding a negligible fall in inter-company interest receivable were up £61.3m to £342.5m largely the result of inflation increases on index liked debt. The underlying figure excluded a shift in non-cash fair value movement in derivative financial instruments from a £116m loss in 2017 to a gain of £117.6m in the report year.
AMP6 gross capital expenditure for the year was £460.9 million comprising £235.8 million on capital maintenance and £225.1 million on capital enhancement up 20% compared to £381.2 million in the second year of AMP6.