By Prerna Bedi and Anchal Rana
(Reuters) - British water firm United Utilities said on Wednesday it expects lower annual bonuses from regulator Ofwat that are granted for exceeding service targets, as stormy weather in England hampered its performance.
The company now expects outcome delivery incentives (ODIs), which refer to rewards for delivering beyond committed performance targets, of 40 million pounds ($50.20 million), compared with the "above 50 million pounds" forecast earlier.
Numerous storms -- including 10 named ones since September as reported by the UK Met office -- have brought exceptionally high levels of rain and impacted the water firm's performance, as pipelines overflow.
However, United Utilities and peer Severn Trent (LON:SVT) stuck by their full-year 2023 forecasts on Wednesday, betting on higher consumer bills and higher consumption levels.
Ofwat, which regulates water firms in England and Wales, forecasts the average increase in water bills for 2024/2025 to be 27.4 pounds ($34) or about 2.30 pounds a month.
At the same time, both companies said they were supporting several hundred thousand of their customers through bill reductions and other measures, amid government and public scrutiny over rising bills amid soaring costs of living and subpar environmental standards.
Severn Trent, which supplies across the Midlands of England as well as a stretch of East Wales, retained its annual ODI rewards expectations of 50 million pounds. It expects annual revenue of between 2.15 billion pounds and 2.2 billion pounds for its regulated water and waste water business.
Meanwhile, United Utilities expects annual revenue to be 150 million pounds higher than 1.82 billion pounds last year.
($1 = 0.7969 pounds)