South East Water: Heatwave last year caused £74m loss as industry debts rise
South East Water has suffered hefty losses, worsened by a record-breaking heatwave which has put pressure on its creaking infrastructure and racked up costs for sourcing new supplies.
The utilities firm, which serves 2.3m homes across Surrey, Kent, Sussex, Hampshire and Berkshire, today posted a pre-tax loss of £74.2m for the 12 months to the end of March, a painful reverse on the £17m profits enjoyed a year earlier.
While revenue was up 2.5 per cent to £257.5m, extreme weather was a severe financial blow for the supplier – costing South East Water £17m over over the same period.
This includes £6.6m to source new water, £5.5m in customer compensation and £4.9m repairing leaks and bursts across its pipeline network.
The business revealed it has been fighting the driest conditions in Kent since records began in 1836, and the lowest rainfall in Sussex since 1911.
Water demand was also at an all-time high during the hotter weeks of last summer, including during the pandemic, which was putting pressure on the company’s supplies.
It has been forced to impose a hosepipe ban on its customers in Kent and Sussex, despite producing an additional 120m litres of water per day last year – equivalent to supplying four towns the size of Maidstone or Eastbourne.
The company said: “Whilst we acknowledge that the climate is changing, we have seen an exceptional combination of extreme weather events this year that has significantly impacted on our business operations and financial performance.”
South East Water’s disappointing financial performance comes amid sustained scrutiny on water companies, which have been in the spotlight over their handling of sewage and piling debts.
Collectively, the industry has racked up a £65bn debt mountain, including £14bn at Thames Water – which has been scrambling for funds to shore up its operations.