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ANNUAL REPORT PRESENTATION

ANNUAL REPORT PRESENTATION. Celebrating a decade of water services delivery in a democracy. ANNUAL REPORT H KASAN. TARIFFS K NAICKER. WATER BOARD ACCOUNTABILITY P CAMAY. CONTENT. Rand Water profile Customer Sales profile Sales trend Cost of raw water Projected input costs vs CPIX

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ANNUAL REPORT PRESENTATION

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  1. ANNUAL REPORT PRESENTATION Celebrating a decade of water services delivery in a democracy

  2. ANNUAL REPORT H KASAN TARIFFS K NAICKER WATER BOARD ACCOUNTABILITY P CAMAY

  3. CONTENT • Rand Water profile • Customer Sales profile • Sales trend • Cost of raw water • Projected input costs vs CPIX • Gross profit • Profitability

  4. CONTENTCONT Value creation Return on assets Business performance Indicators Performance Highlights Social responsibility trend Future developments Decade of Service Delivery - Review

  5. Rand Water profile • Largest water utility in Africa • Bulk water supply increase to 3 414 M/d (3340M/d : 2003) • Supplies 12 million people daily • Sole area of service 18 000 km² • 13 000 km² joint area of service with other Water Boards

  6. Rand Water profilecont • Turnover : R3 258 bn ( R2 884 bn : 2003) • Assets : R5 232 bn (R4 892bn : 2003) • Staff employed : 3 097 (3 108 : 2003) • Corporate ISO 9001 : 2000 accredited • All plants ISO 14001 accredited

  7. CUSTOMER SALES PROFILE

  8. SALES TREND

  9. COST OF RAW WATER

  10. PROJECTED INPUT COSTS VS CPIX

  11. GROSS PROFIT

  12. PROFITABILITY

  13. VALUE CREATION

  14. RETURN ON ASSETS %

  15. PROFITABILITY Why generate large surplus (profit) ? • Capital investment planned for next 5 years = R2,5 billion • To access funds (debt) at lowest cost to fund capital investment • No loans from government • No guarantees from government • Ensure sustainability • Not profiteering but recovering cost of capital

  16. BUSINESS PERFORMANCE INDICATORS

  17. BUSINESS PERFORMANCE INDICATORSCONT

  18. BUSINESS PERFORMANCE INDICATORS

  19. PEFORMANCE HIGHLIGHTS 33% • Surplus : R375 million • Revenue: R3 258 million • Cash generated from operations • Increase in sales 13% 9,1% 2,2%

  20. PERFORMANCE HIGHLIGHTScont 2003 2004 89% 88% • Customer SLA evaluation • Customer Satisfaction Index • Training spend ( as % of Total Payroll) • Designated groups at management • BEE spend 77% 77% 6,6% 7% 60% 64% 42,3% 46%

  21. SOCIAL RESPONSIBILITY TREND

  22. FUTURE DEVELOPMENTS RAND WATER SERVICES • Providing water services value adding to municipalities in South Africa • Back-up supply for SASOL R40 million pipeline • NEPAD initiatives

  23. FUTURE DEVELOPMENTScont INFRASTRUCTURE PROJECTS • BRAKFONTEIN/RUSTENBURG 80 KM PIPELINE : R450 million currently doing environmental impact • WESTERN HIGHVELD REGION PROJECT : R113 million of which R40 million is from Rand Water

  24. FUTURE DEVELOPMENTSCONT. • A total of R2,5 billion capital investment is planned over the next 5 years • R962 million in infrastructure development projects in progress

  25. DECADE OF SERVICE DELIVERY - REVIEW

  26. DECADE OF SERVICE DELIVERY • Participated in Presidential Lead projects Winterveldt, Bushbuckridge (R142m) • The project facilitated supply through 3 500 communal standpipes – benefiting approximately 1 million people • R215 million worth of projects implemented by CBPD • Winterveldt sanitation project – more than 2 540 toilets for Winterveldt built (R8,3m) benefiting 25 000 people

  27. DECADE OF SERVICE DELIVERY • Integrated Water Demand Management Interventions: R60 million • Established Rand Water Services Pty (Ltd) • Launched Rand Water Foundation • Significant Transformation within the organization • Designated group – Management level 64% (33% : 2000) • Women representation in management, professional and supervisory – 28,2% (22% : 2000)

  28. RAND WATER IS IZANDLA ZIYAGAZANA

  29. Tariff Setting & Accountability Rand Water Water Affairs & Forestry Portfolio Committee October 2004

  30. ISSUES • Municipal Financial Management Act: 6 months advance notice • National Treasury & SALGA: 40 days for consideration • Bulk Water Supply Contract: prior consultation and information sharing • Core/Primary activity vs. non-core

  31. CORE Bulk Water Bulk Sanitation Rand Water Board NON-CORE Retail Water Community Projects Business Devt. Farm Operations Pipe Manufacturing Rand Water Services (Pty) Ltd ISSUES – Core vs. Non-core

  32. DWAF raw water pricing Board prelim. approval Customer Consultation & Information Sharing Board prelim. approval Submission to Treasury and SALGA Board final approval Customer Notification Parliamentary approval Aug. 2004 Sept. 2004 Sept. 2004 Oct. 2004 Oct. 2004 Dec. 2004 Dec. 2004 March 2005 PROCESS

  33. THANK YOU

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