Dwr Cymru Welsh Water profits have fallen to £1 million – down from £25 million in 2015, according to its half-year financial results published today.

The water company said the reduction in underlying profit reflects primarily increased expenditure, including on the maintenance of infrastructure assets, and increased interest costs resulting from higher RPI inflation.

Welsh Water’s AMP6 capital investment has accelerated with overall investment of £161 million, compared to £123 million in 2015.

Cash collection has improved, with the cost of bad debt falling from £12.5 million to £11.2 million in the six months.

Regulatory gearing – total net debt as a percentage of regulatory capital value – has fallen to 56% (down from 57% in March 2016 and 93% in 2001).

The company’s key investment projects over the past six months – which are part of the company’s commitment to a record £1.7 billion investment in its network between 2015 and 2020 - include:

• £31 million investment scheme in Bryn Cowlyd Water Treatment Works which will ensure nearly 100,000 customers in Llandudno, Colwyn Bay, Conwy and the surrounding area continue to receive a top quality drinking water supply
• Nearly £5 million at Llanberis Wastewater Treatment Works to make sure the treated water leaving the works is of the highest standard;
• Investing £7 million in the Wastewater Treatment Works in Chester, which includes improved treatment processes and new river pumps to reduce the chance of flooding in the local area;
• Over £21 million in the water network in Ceredigion and Pembrokeshire, £10 million in Flintshire and £15 million in north Herefordshire to provide customers with clean, fresh water for years to come by replacing or cleaning over 300 kilometres of pipe;
• £8.5 million in Haverfordwest to improve the environment and prevent future flooding by building a brand new treatment works in Hook; and
• Improving bathing water quality by investing nearly £7 million in the Gower to help ensure that Wales retains around a third of all the UK’s Blue Flags – whilst only having 13% of the coastline.

Independent research from the Consumer Council for Water (CCWater) shows Welsh Water was the best-rated on value for money and satisfaction across drinking water and wastewater services – as well as achieving its best-ever result in the latest survey of customer satisfaction by industry regulator Ofwat.

Welsh Water Chief Executive Chris Jones said:

“These results are testament to the customer-led way of working that is a fundamental part of our not-for-profit model.”

“The progress we’ve made is borne out in the encouraging independent reports, which show we are consistently achieving amongst the highest standards of customer satisfaction in our industry. Our challenge now is not only to maintain these standards but improve on them, so that we are meeting our customers’ expectations all of the time.”

Around 60,000 of the water company’s low-income customers benefit from a range of social tariffs which provide assistance to those who are struggling to pay their bills. This is a particular problem in Welsh Water’s area - 32% of its customers spend more than 3% of their disposable income on their water and sewerage bills.

As reported in June 2016, more robust debt collection activity and related system issues led to a temporary increase in the number of written, largely emailed, complaints in early 2016. Targeted action plans have led to a significant reduction in complaints, though there is still more work to do.

Further progress has been marked in Welsh Water’s service to developers – tasked with connecting thousands of homes and businesses to its network every year – which saw the company ranked top in 2015-16 and sustaining its high rank in the first six months of this financial year.

Glas Cymru Chairman Alastair Lyons said:

“Welsh Water has continued to make strong operational and financial progress over the past six months, our unique not-for-shareholder model puts customers first to provide the high quality service they rightly expect. Over the coming months we will continue to implement an extensive investment programme to improve further the services we provide.”