UK's United Utilities forecasts higher costs from regulatory charges
Rewrites with annual forecasts, dividend throughout
May 16 (Reuters) -UK's water firm united Utilities UU.L forecasted higher 2024-2025 costs due to regulatory charges it might have to pay for overflows from high rainfall, even as it guided a 10% rise in revenues helped by higher inflation.
"Exceptionally high rainfall during the year adversely impacted performance such as flooding and we expect to receive penalties against these commitments for FY24," the firm said in a statement.
The Warrington-headquartered firm said charges from the floods will impact its outcome delivery incentives (ODIs)performance which took a hit in 2023-2024 as well.
ODIs are annual bonuses granted for exceeding service targets from Ofwat, the water regulator for Britain and Whales.
The water supplier to North West England posted revenue of 1.95 billion pounds ($2.47 billion), up 8.1% year-on-year and an adjusted operating profit of 517.8 million pounds for the year ended March 31.
Analysts on average expected the utility to post annual revenue of 1.98 billion pounds and an operating profit of 522.2 million pounds, according to LSEG IBES estimates.
The firm declared a dividend of 33.19 pence apiece for the year, up 9.4%.
($1 = 0.7888 pounds)
Reporting by Prerna Bedi in Bengaluru; Editing by Sherry Jacob-Phillips and Nivedita Bhattacharjee
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