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Record high energy prices have added an estimated £65 million to United Utilities’ operational costs for the first six months of the financial year.
This is the impact in the six months to 30 September on the 10% of its energy costs that were not hedged. In a financial update, the company said it expects costs in the second half of the year to be similarly impacted.
It said chemical costs were also higher than previously calculated due to inflation. The company had expected underlying operating costs to rise by £100 million for 2022/23, but has now said these will be materially higher.
The company said it anticipates a lower underlying operating profit than the same period 2021/22, while group net debt is expected to be higher than at the end of March. This reflects the impact of higher inflation but has been partly offset by the sale its renewable energy business announced in July.
UU said its outcome delivery incentive (ODI) performance for the six months, and looking ahead through the year, remains on track but warned some targets would be sensitive to volatile winter weather.
The company will publish its half year results on 23 November.
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