Pennon swings to first-half loss on South West Water weakness
HY pre-tax loss 13.8 mln stg, excluding SES division
South West Water operating costs up about 5% in HY
Adds details on costs in paragraph 5, on SWW campaign in paragraph 6 and 7
Nov 27 (Reuters) -British water utility Pennon PNN.L swung to a loss in the first half, partly due to lower consumption and a lacklustre performance in its South West Water division, which was hit by a parasite outbreak this year.
The company said on Wednesday revenue at South West Water, which serves areas including Devon and Cornwall, slipped about 2% during the period, while underlying operating costs jumped nearly 5%.
The British water sector is facing growing scrutiny over environmental failures, financial instability, and infrastructure challenges, prompting calls for regulatory reforms and better investment in sustainability.
In September, Pennon said that it had recognised costs of about 16 million pounds ($20.1 million) in the first half of the year related to the Brixham water quality incident, caused by a parasite that gave people diarrhoea.
The company also said it had incurred about 4 million pounds in restructuring costs across the entire group.
In September, Pennon had said its "Water is Precious" conservation campaign, aimed at promoting water efficiency, was impacting its first-half revenue due to lower consumption.
South West Water, Pennon's largest water business, launched the campaign in February to encourage efficient water use, and has invested around 125 million pounds to boost water resources, aiming for about 45% and 30% additional storage in Cornwall and Devon respectively.
The London-listed company reported an adjusted pre-tax loss of 13.8 million pounds for the six-month period ended Sept. 30, versus a profit of 9.1 million pounds last year.
The losses increased to 18.6 million pounds if its recently-acquired SES Water business is incorporated into the half-year results, the company said.
SES Water was among the seven companies put under Ofwat's "elevated concern" category in terms of their financial resilience in the regulator's report published last week.
($1 = 0.7948 pounds)
Reporting by Aby Jose Koilparambil and Aatrayee Chatterjee in Bengaluru; Editing by Sherry Jacob-Phillips and Jane Merriman
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