* H1 underlying operating profit down about 1 pct to 324.2
* Infrastructure renewals expenditure up 38 pct to 66.4 mln
* Sees good financial performance over the remainder of the
* Sets interim dividend of 10.67p, an increase of 6.7 pct
* Shares down 1.5 percent; peers Pennon, Severn Trent also
By Adveith Nair
LONDON, Nov 23 United Utilities,
Britain's largest listed water utility, reported a dip in
first-half profits on Wednesday, which it blamed on capital
"We have continued to make high levels of capital investment
in our assets in driving the resilience of our network and we
remain on course to invest up to 700 million pounds in the full
year," Chief Executive Steve Mogford said on Wednesday.
Regulatory capital investment in the half year was 275
million pounds, including infrastructure renewals expenditure
which was up 38 percent at 66.4 million.
The increased spending pushed its underlying pretax profit
down 5 percent to 184.9 million pounds, which it said compared
with a consensus forecast by analysts of 183.5 million pounds.
Underlying operating profits dropped 1 percent to 324.2
It raised the interim dividend by 6.7 percent to 10.67 pence
Investec analyst Angelos Anastasiou said the results were
largely in line with expectations, and added "there is scope for
earnings to grow over the next three years."
While increased spending weighted on profits, the company
benefited from a 4.5 percent regulated increase in prices which
pushed revenue up 4 percent to 792.7 million pounds.
Separately on Wednesday, industry regulator Ofwat published
its consultation on the methodology for setting future price
limits for the sector.
"Today's proposals suggest retaining the RAB, with an
allowed return, and five-year price control for the wholesale
part of the business," said analysts at Deutsche Bank, adding
that Ofwat suggests a separate price limit for retail to extend
"Our initial view is that the publication looks relatively
neutral for the sector, with the central proposals broadly in
line with expectations," the analysts added.
The new price limits will be set in 2014.
Shares in United Utilities were down about 1.5 percent at
602 pence. Peers Pennon and Severn Trent, which
are due to report results later this week, were also in the red.