Affinity operating profits down 70% as Covid costs bite

Operating profits at Affinity Water were down year-on-year more than 70% for the 12 months to 31 March 2021 as revenue for the period slid £20.4m to £286.8m according to the company’s latest annual report.

A rise in operating costs during the report period from £280m to £291m – with about half of that attributed to servicing increased demand driven by Covid restrictions – contributed to a fall in operating profit from £45.6m to £13,6m.

A £15.3m drop in business market sales and a £5.3m Covid addition to operating costs along with £2.2m in lost contributions from new connections was offset by a £9.5m rise in household market revenue. The addition of a £16.8m fall in revenue due to price control-reduced tariffs along with other operation expenses including, greater inflation and increased depreciation took their toll on operational income.

The company reported a loss before tax of £63.5m following a marginal profit in the previous year.