Cold snap not a worry for Northumbrian

1st Feb 2011 08:28

Water group Northumbrian Water said revenues and operating costs are expected to be of a similar level in the second half of its financial year to those for the first half.The company said the cold snap in December had caused delays in the capital expenditure programme at its principal subsidiary, Northumbrian Water Limited (NWL), but NWL's major investment projects, to expand Abberton reservoir in Essex and build a second advanced anaerobic digestion plant at Howdon on Tyneside, are progressing to plan. Total group capital expenditure for the year, net of contributions, is now expected to be around £200m.The December freeze and subsequent thaw also resulted in an increased number of leaks across Northumbrian's network, though the impact on customers was minimised and additional costs to fix the problems were not significant. Discussions are in progress to conclude both a new loan facility for NWL from the European Investment Bank and new facilities to replace the £125m of debt at Northumbrian Services Limited which matures in May 2011. The group's cash position at 31 December 2010 was £210m, which is deemed sufficient to meet the needs of the business to March 2012, taking account of planned new financing. "We are in the process of negotiating committed bank facilities of circa £100 million for NWL which we expect to be in place by 31 March 2011," the company said. Net debt is expected to be around £2.32bn at 31 March 2011.The group has agreed to make new lump sum contributions to its defined benefits pension scheme in respect of the period from 1 January 2011 to 31 March 2015. Amounts totalling £22.9m have been paid in the period covered by this statement and a further £47.1m will be paid in April 2011.