WESSEX Water has reported a 25 per cent fall in its half-year profits after the price review by regulator Ofwat.

Pre-tax profit fell to £48.3 million for the six months to September 30 - turnover was down nine per cent to £128.6 million.

Wessex says its profits fall reflects the fact that customers' bills were cut by an average of 10 per cent from April 1 this year.

Wessex has also faced additional costs required to meet new quality and environmental standards.

But despite that, operational costs were down by £400,000. Costs fell by four per cent when account is taken of expenditure to meet these new obligations.

Drinking water standards remain at virtually 100 per cent. Compliance at the company's sewage treatment works has improved to 99.3 per cent.

Chairman Colin Skellett said: "Over the last six months we have continued to make excellent progress. Our aim is to maintain Wessex Water at the forefront of service, standards and efficiency over the next five years."

In April Wessex Water re-launched its customer guarantee scheme as the Wessex Water Promise with improved guarantees and higher compensation payments. This scheme already offers customers a package of guarantees that go beyond the new mandatory Guaranteed Standards Scheme announced by the government.

Wessex Water is continuing to invest above and beyond the minimum legal requirements to protect the coastal area.

By the end of 2000, new or upgraded sewage treatment works will become fully operational at 18 sites along the region's coastline.

Examples include the treatment works at Swanage and Porlock, which use the latest membrane technology to produce effluents that "far exceed" the standards required by the Urban Waste Water Treatment Directive.

The wider Wessex Water business has been successful in winning new contracts, including one to manage sewerage services for 40 per cent of Welsh Water customers and a membrane-based sludge treatment plant at Daldowie near Glasgow.

Mr Skellett said: "Wessex Water's track record makes it well placed to benefit from new developments."

Wessex Water, owned by US group Enron, provides water to more than one million people and treats sewage from more than 2.5 million customers.