The UK's largest water company recorded a 2 per cent drop in pre-tax profit to £195.7 million for the six months to 30 September compared with £199.7 million for the same period last year.
But the company’s turnover was up 4.8 per cent on the preceding period from £745 million to £780.5 million.
Thames Water’s capital investment was up 10 per cent to £526.7 million from £478.2 million.
By year end the company expects to invest £1 billion on improvements for the second consecutive year.
Thames Water chief executive David Owens said: “These are a sound set of results, reflecting continued emphasis placed on improving productivity as well as strong financial management.
“Our focus on tightly managing operating costs and maximising efficiency has helped us reduce the impact of rising power costs and the increased cost of borrowing.
"Since the change of ownership and management two years ago, we will invest a second annual total of £1 billion in maintaining and upgrading our network and improving customer service - the largest investment in the industry.”