Thames Water has plunged to a staggering £1.65 billion annual loss as the troubled utility's debt mountain ballooned to £16.79 billion. The water company's financial crisis deepened dramatically in the year to March 31, marking a catastrophic turnaround from the previous year's £157 million profit.
The struggling firm's dire performance was driven by a massive £1.27 billion bad debt provision on intercompany loans and £122 million set aside for regulatory fines from Ofwat. Thames Water's net debts swelled by another £1.65 billion over the 12-month period, highlighting the scale of its financial distress.
Pollution performance disappoints
The utility also reported "disappointing" results on pollution incidents and sewage spills, adding operational failures to its mounting financial woes. These environmental shortcomings compound the company's troubles as it battles to stay afloat amid the debt crisis.
The grim figures emerge as Thames Water remains locked in talks with senior creditors over a rescue funding package. Private equity firm KKR dealt a severe blow to the company's survival prospects last month when it pulled out of plans to inject much-needed cash.
Chief executive acknowledges crisis
Chris Weston, Thames Water's chief executive, admitted the company's debt levels are unsustainable and require urgent action. He said the firm is progressing with senior creditors' plans to recapitalise the business and return to "a more stable financial foundation".
Weston warned that any rescue deal would demand a complete overhaul of the regulatory framework governing water companies. He acknowledged the scale of the challenge facing Thames Water, stating it would take "at least a decade to turn Thames around" even with successful restructuring.
(PA/London) Note: This article has been edited with the help of Artificial Intelligence.
