South West Water parent Pennon today warned over a plunge in trading at its waste division as recycling prices continue to slide.
Pennon said the first half performance so far at Viridor, which provides recycling and waste collection services, was "significantly" below a year earlier, when recycling prices peaked.
The waste business - seen as the group's growth engine less than a year ago - has suffered from tumbling prices for waste paper and recovered metals in recent months as wider economic woes take their toll.
Pennon has been slashing costs at Viridor and renegotiating customer contracts to offset the division's trading troubles.
But it said today: "Viridor is not immune to the difficult conditions in the world economy and trading has been significantly below the high level of last year's first half with recyclate prices remaining under pressure."
South West Water - which supplies water to Devon, Cornwall and parts of Somerset and Dorset - has seen a "robust" start to the financial year, according to Pennon.
