Thames Water has said it has cut the amount of leakage from its pipes as part of a "back-to-basics" approach to running the firm.
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Tackling "inefficient" business practices had also helped it improve its performance, it added.
The firm unveiled a 50% rise in profits to £199.7m in the six months to the end of September.
Thames Water was criticised by the regulator Ofwat last year for its poor leakage record.
But the company said that in the last year it had lost an average of 695 million litres per day (mld) - about 120 mld less than a year earlier.
Thames added it had laid 266km of new water mains since April 2007, putting it well ahead of its target.
And it said that greater efficiency had cut operating costs by £50m, or 9.7% over the six months.
Chief executive David Owens said that the firm had "huge strides to address the issues which really matter to our customers and stakeholders".
"The legacy of high operating costs and inefficient working practices has now been put behind us," he said.
As well as providing drinking water to 8.5 million customers in London and the south east, the company also manages waste water for about 13.5 million customers.