The group, which was formed from the merger of Welsh Water and South Wales Electricity, stressed that it was not preparing to cut the payout. But Graham Hawker, Hyder's chief executive, said: "There is a high degree of uncertainty around the utilities at the moment and anyone who stands up and makes predictions about dividend policy is being courageous."
The company is facing a review of water charges from 2000 which is likely to involve a big one-off price cut in the first year. Swalec also faces price reviews in its distribution business - the main profit earner - and supply arm from 2000.
In an attempt to reduce its exposure to tighter regulatory controls, the group is building up non-regulated businesses. Last year, non-regulated profits reached pounds 48m - 16 per cent of group profit before interest. Hyder Services, the merged billing arms of Welsh Water and Swalec, increased profits to pounds 22m helped by annualised cost savings of pounds 15m while the profit contribution from its pounds 145m investment portfolio in projects ranging from a Melbourne toll road to Docklands Light Railway more than doubled to pounds 12.6m.
The improvement helped offset pounds 20m of charges related to gas marketing and the cost of preparing for domestic power competition and tackling the millennium bug. Hyder has so far signed up 400,000 gas customers, including 235,000 within its franchise area, or 30 per cent of the market.
Mr Hawker added that 25 per cent of its one million customers now took all three services - gas, water and electricity. "The multi-utility idea is working and the evidence is there both in terms of efficiency and our ability to add revenues to the top line."
Mr Hawker said that 15 of Britain's Blue Flag beaches - one-third of the total - were in Wales and that Hyder's aim was to raise the number to 50 by the start of the next millennium.Reuse content