- From: Vol 4, Issue 12 (December 2003)
- Category: Need to know
- Region: Unspecified
- Country: France, South Africa and United States
- Related Companies: American Water Works, Anglian Water, AWG, Culligan, Eon, RWE/Thames (Water), US Filter and Veolia
As a guest you can read up to 3 full articles before a subscription is required.
You can read a further 2 articles for free.
Veolia’s third-quarter figures showed top line sales dip 1% to €8,334 million, primarily as a result of a 4.9% negative exchange rate movement.
Organic growth was 4.3%, driven by a 4.3% increase in France (benefiting from the hot summer), and a 20% increase in revenues from elsewhere in Europe, North Africa, and Asia as a result of new contracts and hot weather. Culligan helped US Filter to a 6.8% dollar improvement. Veolia Water Systems, again the poorest performer in the group, was down 19%. Overall, Veolia Environnement was up 1.7% in revenue terms but down 3.5% at the earnings before interest and tax level, largely as a result of adverse exchange rate movements. At constant exchange rates, EBIT would have been up 1.4%. Water put in the best performance of the group.
RWE’s figures for the first nine months of 2003 showed a 52% increase in revenues from its water interests to €3,156 million and a 38% increase in operating profit to €967 million, compared with the same period in 2002. This was primarily because of the first time inclusion of American Water (which delivered operating profit of €371 million on revenues of €1,437 million. Revenues and operating profit from Thames’ regulated business (no longer the largest segment of RWE’s water group) were down 6% and 11% to €1,203 and €424 respectively, because of adverse currency movements.
“Net of currency and consolidation effects, revenue earned by our water business would have risen by approximately 5%. This was caused by rate adjustments made in the UK owing to inflation as well as the increase in the amount of water sold in the US, Asia and Chile”, the company said, adding that the UK business was the main contributor to the 6% organic earnings growth before currency adjustments it achieved in the water sector. Overall, RWE was up at the operating level but down at the net earnings level because of high interest and amortisation charges relating to its acquisitions.
The Germany Federal Cartel Office gave RWE the go-ahead to acquire stakes in four stadtwerke, but only on the condition that it disposed of stakes in two others. The company was also barred from taking further stakes in other municipal works companies without disposing of equivalent stakes at the same time. The ruling, which also applies to RWE’s arch-rival in the energy sector, Eon, will make it easier for foreign companies to crack the German market (see story p21).
AWG, the bad boy of the UK water industry also introduced a new chief executive, Jonson Cox, who was head of Yorkshire Water until 1998. The markets were not overly impressed, but they had a bigger disappointment in the shape of the water regulator’s refusal to allow the company to increase its water prices from next April. Au contraire – Ofwat suggested that Anglian Water’s prices ought to fall by 2.4%.
Mason’s Water Yearbook 2003-2004 was published this month, including its annual survey of the spread of private sector participation. The 2003 figures show the slowest rate of increase since the survey started five years ago. The number of people now served by private water companies is now 489 million, up 28 million on the 2002 survey. The increase recorded in the 2002 survey was 29 million (see story p10.)