Water Corp posts $800m profit

The Water Corporation has posted a record profit of more than $800 million just weeks after warning that budget cuts were pushing parts of its business to the brink.

Handing down its annual report yesterday, the corporation said it had returned dividends and tax equivalents to the State Government worth $811 million in the 12 months to June 30.

The figure - believed to be biggest profit recorded by a State-owned utility in WA - was 41 per cent higher than the year before.

The result was based on a 16 per cent increase in revenue to $2.52 billion that had been caused by "strong population growth" and a big jump in developers' fees.

It also came on the back of an inflation-busting hike to water charges of 6 per cent despite claims from WA's economic watchdog that consumers were already paying enough for water.

Offsetting the profit result, which is the underlying measure of the Water Corporation's financial performance, was a $566 million subsidy paid by the State to the utility.

The subsidy was paid to compensate the Water Corp for providing services to unprofitable parts of the state, such rural and remote areas, as well as concessions to vulnerable customers.

This meant the "net accrual" to Government was $245 million - up from $140 million last financial year and double what the corporation expected.

Shadow water minister David Kelly said the profit result suggested the Government had its priorities wrong.

Mr Kelly said the Government should plough the corporation's profits back into the business or use the money to ease pressure on water bills.

"When that accrual comes back to government . . . we spend it on vital infrastructure and services for the people of WA," Water Minister Mia Davies said.