Inflation-linked finances pull SES Water into pre-tax loss

SES Water has reported a pre-tax loss of £5.4m for the year to 31 March 2022 from a £3.87m profit in the prior year as inflation pushes up financing costs

Financing costs doubled to £15.9m as high inflation increased index-linked bond charges by £4m and the company incurred fees of £3.5m for renegotiating terms on index-linked debt with bondholders.

Revenue for the reporting period fell 4% to £62.95m primarily due to a 7% fall in household metered revenue to £28.5m as volumes consumed fell away from those seen during Covid lockdown along with a 4% reduction in charges. And business revenue failed to recover fully post lockdown with many commercial properties in the region remaining empty. Bad debt provision was increased to £7.9m

Operating profit was £10.2 million, down 9% from the previous year as operating costs increased 4% to £56.6m. Operating income was shored up by a £1.1m lift elsewhere including asset disposals of £1.3m.