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Water utility Pennon Group PLC said it traded in line with expectations in the first half ended September 30, despite tough macroeconomic conditions amid the cost of living crisis.
The Exeter-based company hailed its progress in achieving on outcome delivery incentives, or ODI.
‘South West Water delivered the second highest ODI performance in the sector for 2021/22, and as a group we are on track for a net positive ODI outcome in 2022/23,’ Pennon added.
Looking forward, ‘for 2023/24 and 2024/25 have de-risked around 40% of our power needs locking in rates around 10% above the 2021/22 outturn’.
The firm said 95% of its energy usage for financial 2023 is hedged, though it expects total power costs to now be around £50 million higher year-on-year. It said its total power cost in financial 2022 amounted to £56 million.
In addition, it said it is allocating £160 million for investment in renewable energy generation.
Commenting on the cost-of-living crisis, the firm said: ‘We recognise the pressure that the current cost-of-living crisis places on many of our customers. Our broad range of affordability measures ensures we are able to support those in need, with over 100,000 customers across our regions benefiting.
‘In April we also announced plans to accelerate sharing an additional £20 million of outperformance with households across South West Water, Bristol Water and Bournemouth Water as part of our unique WaterShare+ scheme, providing further financial support at a time when customers need it most.’
In May, Pennon posted annual results for the year ended March 31. Pretax profit dropped 3.3% to £127.7 million from £132.1 million a year ago, in line with internal expectations.
Revenue climbed 23% to £792.3 million from £644.7 million. Revenue growth was driven by non-household demand and contract wins from Pennon Water Services Ltd, the company explained.
Pennon shares were 2.5% higher at 787.50 pence each in London on Friday morning.
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