Umgeni Water

1
Umgeni Water
Presentation to the Portfolio Committee
on Water Affairs Forestry 2004/2005 Annual
Report Financial Statements 24 March 2006
2
Contents

• Introduction by Chairman
• 2004/2005 Key Financial Highlights
• Business Plan 2005/2006
• Bulk Water Service Delivery Plan

3
Key Financial Highlights 2004/05

• Surplus generated for first time since 1999
  R55m (2004 R37m Loss)
• Revenue 11 increase to R1 billion
• Volumes 4 increase to 353 million m3
• Positive Cash flows from operating activities
  R221m (2004 R97m)
• Reduction of net debt
• Net debt decreased by R 300m
• Debt Equity Ratio reduced by 43
• from 8.1 to 4.59 (Target lt 1.25)
• Debt Service Ratio improved by 126 to
• 1.16 (Target gt1.35)

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TARIFF INCREASES 2006 2007
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Lowlights 2004/05
Lowlights 2004/2005

• R14.4 m Msundusi Municipality outstanding debt on
  the Waste Water Treatment Works at Darvill.
• Delay in the transfer of Rural Schemes to the
  Msundusi Municipality.

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Business Plan 2005/2006

• Budgeted Surplus of R161m
• Budgeted Cash Flow from operating activities of
  R265m
• Continue to focus on driving debt down to
  optimal levels
  
• Accelerated Capital Expenditure to meet
  National Targets
• 2005/2006 R205 m
• 2006/2007 R261 m
• 2008/2010 R240 m
• All funds for the capex programme will be from
  internal
• operating activities only.
• No funding support from national government.

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FUTURE PLANS FOR WATER DELIVERY IN KZN
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Bulk Water Service Delivery Plan
Background

• Umgeni Water, Mhlathuze Water and uThukela Water,
  
• have developed a strategy for a regional
  bulk water supply
• or master plan for the province of
  KwaZulu-Natal.
• The primary aims of the strategy are to
• 1. Ensure that water services and sanitation
  delivery
• within KZN is improved through sustainable
• implementation plans and
• 2. The eradication of water and sanitation
  backlogs

Challenges

• Funding for construction of dams
• Funding for implementation of non bankable
  projects
• Integration to WSAs IPDs

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70 of backlogs are within 7 WSAs
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PMG Note KZN BULK WATER SUPPLY PLAN Umgeni
Water area of suplyAvailable on the Part2 link
of the presentationif there is a problem with
downloading, please email access_at_pmg.org.za
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Thank-you
12
Income Statement 2004/2005 For the year ended
30 June
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Income Statement Abnormal Expenses For the year
ended 30 June 2005

• Major asset impairment
• Shongweni Dam R27m
• HD Hill Umlaas WW R7m
• Planning studies R10m
• Drought relief/spring protection R11m
• Doubtful debts (Darvill WWW)
• Employee Retirement benefits
• Post retirement medical aid R20m
• Defined benefit plan R8.5m

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Balance Sheet 2004/2005 As at 30 June
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Current Ratio - 2005 As at 30 June

• current ratio
  0.735 0.896
• Reasons for Change
• Reallocation of UG55 into Short term R835m
• R150m repayable in June 2006 included in
  short-term
• Annuity loans payable during the year - R100m
• Sale of TKZ01 investment post balance sheet R287m

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Post Balance Sheet Event

• Sale of TKZ01 Long Term Investment on
• 25 August 2005
• Sale proceeds R287m
• Market Value at 30 June 2005 R278,6m
• Realised profit R74m
• Proceeds used towards
• gt UG55 Bond Redemption Portfolio R119m
• (30/6/2005 R794m 94.6 covered)
• (30/09/2005 R834m 100 covered)
• gt Loan 70 Redemption Portfolio R142m
• (R150m 100 covered maturity June 2006)
• gt Reduction of short term debt R26m

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Cash Flow Statement - 2005 For the year ended 30
June
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Water sales distribution
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INCOME STATEMENT OVERVIEW 2001 to 2005
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Debt Management Debt Equity Ratio
21

Debt Management Debt Service ratio
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Cash Flows