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UPDATE 1-Severn Trent profit beats views
May 30, 2012 / 6:47 AM / 5 years ago

UPDATE 1-Severn Trent profit beats views

* Pretax profit down 4.6 pct to 275.3 mln stg vs est 259.3 mln stg

* Higher prices help offset rise in expenses, lower consumption

* Measured consumption to fall about 2 pct this year

* Total dividend up 7.7 percent to 70.1 pence

LONDON, May 30 (Reuters) - British water company Severn Trent reported full-year profit above market expectations as higher prices helped offset a rise in expenses and lower consumption from its metered users.

Underlying pretax profit fell 4.6 percent to 275.3 million pounds ($431.7 million), but comfortably beat estimates of 259.3 million pounds, according to Thomson Reuters I/B/E/S. Sales rose 4 percent to 1.77 billion pounds, in line with estimates.

An increase in sales price last April added 73.1 million pounds to sales. That was somewhat offset by a 10.5 million pound hit due to lower consumption, and a 7 percent rise in total operating costs, which came in at 1.3 billion.

Prices at Severn Trent rose again in 2012, by 5.2 percent, in line with November 2011 RPI.

Severn Trent said on Wednesday measured consumption would continue to fall this year, and expects a decrease of about 2 percent, in line with a 1.6 percent drop last year.

Operating expenditure is set to rise again, the company said, and added that its net capital expenditure programme was expected to be in the range of 570 to 590 million pounds.

In the company’s services business, which provides water and waste treatment in Europe and North America, Severn Trent said market environments remain challenging.

Earlier this month, Britain’s largest listed water utility, United Utilities, and water and waste company Pennon both reported full-year profits above expectations.

Shares in Severn Trent closed at 1,664 pence on Tuesday, valuing the business at just under 4 billion pounds.

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