‘No quick fix’ as Welsh Water makes £8m financial loss

A water company has reported an £8m loss for the past financial year, despite a £46m profit the year before.

Dwr Cymru Welsh Water said it had invested a record £629m in its water and wastewater network in 2024-25.

It claimed this was a 31% year-on-year increase to maintain and improve its assets.

Its annual report said there was “no quick fix” to getting back on track financially due to ageing infrastructure, extreme weather events and more scrutiny.

Gail Davies-Walsh, chief executive of Afonydd Cymru, the rivers trust in Wales, said the company was being honest that improvements were needed but added “environmental performance on the ground needs to improve significantly”.

In April, water bills for households rose by 27% for Welsh Water customers, meaning an average annual bill increased from £503 to £639.

The company said that increase would help fund future investment.

There are expected to be annual increases for the next five years.

Welsh Water said last year a record 153,000 customers were given financial help with their bills.

The company is one of only three water companies in Wales and England to be placed in regulator Ofwat’s “lagging” category.

Ofwat said investments and plans will need to be maintained and accelerated in order to move out of this category.

Ms Davies-Walsh said Welsh Water was “not being shy about admitting their performance is not where it needs to be” but “the real proof will be in the performance report next month”.

“It is currently a two star company and we need a four star company for Wales,” she said, referring to the Ofwat categories.

During 2024-25, Welsh Water said it had improved 144 miles (231km) of rivers and undertaken projects such as replacing the treatment process at Cardigan Wastewater Treatment works, in Ceredigion, increasing capacity at Bangor Beach Road wastewater pumping station, in Gwynedd, and upgrading the wastewater network in Usk, Monmouthhire.

It also faced “two of the most difficult operational incidents it has faced in decades”, the company said – including damage by Storm Bert in Rhondda Cynon Taf and a burst water main in Conwy county.

Welsh Water, which is owned by not-for-profit organisation Glas Cymru, said it has plans for capital investment of £4.2bn.

Glas Cymru chairwoman Jane Hanson said: “There is no quick fix – we recognise the scale of the task ahead and that progress will take time, but we are putting the right building blocks in place.”

Welsh Water chief executive Peter Perry said: “We know we need to go further and faster to make the step change in performance to meet the needs of our customers, communities and stakeholders.”