Northumbrian Water has said the level of business failures among its customers seems to have stabilised.
Its comments came as it reported an 11.5% rise in pre-tax profits to £170.2m for the year to the end of March.
In November, the company said it had been hit by business closures in the north-east of England leaving it with bad debts of £1.7m.
Northumbrian Water provides services to 4.3 million people in the both the north-east and south-east of England.
It provides water and sewerage services to 2.6 million people in the north-east of England, and water services to 1.7 million in the south-east of England where it trades as Essex & Suffolk Water.