Cost increases erode Thames' half-year operating income

Thames Water has reported a year-on-year fall in interim operating profit of £118.7m to £222.9m as operating costs for the half year to 30 September rose year on year by £41.9m to £840.6m. This included a rates rebate in the previous year, a £15.1m rise in employment cost and a £27m hike in depreciation and amortisation in line with the company’s investment programme.

Revenue was down £64.6m to £1,0321m due to the emerging pattern in the sector of the impact of tougher price allowances and falling business sector sales partially offset by increases in the household sector.

Thames’ loss before tax was up £232.6m to £246.5m after a £10m fall in finance expenses and a £70m increase in financial income were cancelled by a £194.3m leap in losses on financial instruments.