Water Utility Pennon Says On Target To Meet Full-Year Expectations

26th Mar 2018 08:35

LONDON (Alliance News) - Environmental infrastructure firm Pennon Group PLC said Monday it has performed in line with expectations in its soon-to-end financial year, with all three divisions delivering.

Its South West Water business "continues to perform well", and it expects its return on regulated equity for its year ending March-end to be at a "sector-leading" cumulative rate of 11.8%. Pennon said South West Water is well positioned to keep outperforming its sector through the years 2020 to 2025.

Pennon's operational energy recovery facilities in the Viridor business continue to do well, it said, with availability expected to be over 90% in its current year, with a second half weighting to the energy recovery facilities's earnings before interest, tax, depreciation, and amortisation.

Pennon expects the overall expenditure for the energy recovery faclility in Glasgow to be GBP95.0 million higher than the original GBP155.0 million target due to the need for a contractor change, though it is in talks to receive costs from the original contractor, Interserve PLC.

Depending on these talks, it said, margins could be lower than expected on the project, but this should not have an "immediate" impact on earnings.

Pennon expects lower second-half Ebitda from recycling due to China's import regulatory changes, but this is not expected to materially affect on financial performance.

Results for Pennon's year ending March are to be released on May 25.

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