In a trading update today, 14 September, the Board said despite progress being made on contracts within its exited Energy from Waste (EfW) business, it is likely final costs will "significantly exceed the £160m currently provided".
The company made a £94m loss last year after revealing serious problems at its Glasgow Recycling and Renewable Energy project.
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In February this year, Interserve raised its estimate of the damage done building energy-from-waste plants from £70m to £160m.
The company stated: "Trading in the UK in July and August was disappointing, particularly in support services, but also in the construction division. As a result of this, the Board now believes that the outturn for the year will be significantly below its previous expectations.
"Further progress continues to be made on contracts within our exited Energy from Waste business.
"However, the anticipated timing and complexities of completion mean that the Board now considers it likely that the final costs will significantly exceed the £160m currently provided.
"A further update will be provided in due course.
"The Board continues to believe that the group will be able to operate within its banking covenants for the year ended 31 December 2017. "
