Pennon Group PLC (LSE:PNN, OTC:PEGRY) said it has been experiencing record demand for water as more people have moved to the regions it serves during the Coronavirus (COVID-19) pandemic.
Water usage and revenue increased now that businesses are reopening following the end of lockdowns. The supplier said pressure on its operational network remained high.
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Underlying earnings (EBITDA) are in line with management expectations as higher costs have been offset by a rise in revenues.
Inflation is expected to push finance costs higher but it should be helped by the increase in Regulated Capital Value (RCV) driving future revenues.
The FTSE 100 group said most of its business plan commitments are on track or ahead of target, while it is making significant progress in delivering its Pollutions Incident Reduction Plan.
In July it unveiled plans to achieve net-zero carbon emissions by 2030, and has since identified renewable energy generation investment opportunities of £60mln, in addition to £20mln associated with projects related to regulatory allowances.
This was the same month the group’s South West Water arm was cited by the UK Environmental Agency for being one of the worst water performers in the sector for allowing raw sewage to spill into rivers and the sea, performing “significantly below target” for pollution for the 10th year in a row.