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TABLE OF CONTENTS
1.
2.
3.
4.
Introduction
Area of service and operation
Corporate Governance
Major achievements in 2005/2006
5.
6.
Strengthening Service Delivery
Strategic Challenges and Remedial Plan
7.
Financial performance
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1. Introduction
• Long term strategies for sustainability are embedded
in annual report
• Progress on all strategic imperatives are highlighted
• Ongoing strategic reviews aligned to performance
management system
• Short interval business reviews to focus on key
priorities
• Presentation based on performance reviews and
audited financial statements
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2. AREA OF SUPPLY
AND
OPERATION
4
5
Service Level Agreements
LOCAL MUNICIPALITIES
•
•
•
•
•
•
•
•
•
Matjhabeng Local Municipality
Nala Local Municipality
Maquassi Hills Local Municipality
Greater Taung Local Municipality
Phokwane Local Municipality
Moshaweng Local Municipality
Ga-Segonyane Local Municipality
Kagisano Local Municipality
Bophirima District Municipality
OTHER CONSUMERS
•
•
•
•
Beatrix (2 Mines)
Harmony (6 Mines)
President Steyn Gold Mine
Ster Diamante Mine
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3. CORPORATE GOVERNANCE
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Corporate Governance
• Board appointment
• Performance contract
– Executive and Senior Management
• Committees
– Board (Executive, Remuneration, Audit
Committees)
– Management( Executive, Management, Divisional,
Procurement, Bursary, Trustee, Safety & Health
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Committees etc)
Corporate Governance
(Cont.)
• Committees continued
– Labour Forums
– Stakeholders ( Co-ordinating Committee,
Catchment Management Committee, Provincial
Water Sector Forums, etc.)
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4. MAJOR ACHIEVEMENTS IN
2005/2006
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Operational Performance
• The following savings were achieved on processes :
― R 2.1m for Energy
― R 0.8m for Chemical
― R 1.3m for Procurement
• Water quality maintained at Class 1 except for
periodic colour and turbidity.
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Project Consolidate
Sedibeng Water carried out the following projects under project
consolidate in Phumelela Local Municipality:
• Site functional assessment, skills audit and technical gap
analysis at the Water Purification and Sewage Treatment
Plants
• Seconded and trained operators in Warden and Memel WTP.
• Refurbishment of Warden WTW
• Refurbishment of Memel Water & Sewage Treatment Works
and training of temporary operators.
• Upgrading of Warden Bulk Sewer (in progress)
• Capacity building: SETA training of operators within the Free
State( Wepener, Ladybrand, Bethlehem & Xhariep)
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Market development
Presentations on the capability statement of Sedibeng Water,
technical audits on treatment works, service agreements and the
establishment of co-ordinating committees were conducted.
Sedibeng Water assisted the following municipalities in line with the
signed Strategic Support contracts:
–
–
–
–
–
Siyanda DM
!Kheis LM
Kgatelopele LM
Mier LM
Kai!Garib LM
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Commercial Equity
Commercial Equity
• Average BEE expenditure is 40%
• Annual targets set were met
• Promoting BEE participation though
― Hand holding and training of SMME
― monitoring and verifying of BEE status
― Encourage establishment of BEE
companies and joint ventures
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Corporate Social Investment
• Invested approximately R1.3m to communities within our
service area.
• The programme concentrated on the following:
― NGO initiated by youth focusing on education
― Youth entrepreneurial venture
― Special needs and farm schools
― Learnership on Water Purification Process Operation.
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Human Resources
(Cont.)
Training
• Financial assistance(24 employees)
• ABET (154 employees)
• Learnership in Water Purification and Process
Operation(10 employees and 10 community
members)
• Experiential training (6 students)
• About 95% of learners who participated in the
above programmes were absorbed within the
organisation
• Focus on courses such as Leadership,
management, finance etc.
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Human Resources
Employment Equity
• EE targets as per plan exceeded
• Appointments aimed at addressing gender balance
and disability
• Specific functional levels receiving undivided
attention e.g. superintendent level
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Customer interaction
Weekly
―Interaction with Ward Committees
―Improved responsive time and reduction of
interruptions
―Reduction of complaints
―Improved performance in line with SLA
• Monthly Co-ordinating Committee meetings
• Customer satisfaction monitoring system with KPI
is in place
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Other
• Assisted Local and District Municipalities in the following:
― Infrastructure refurbishment projects in the North West
― Water quality analysis and scientific services
• Tendered for the management of Vaal Gamagara Government
Water Scheme
Appointed as an implementing agent for the Masibambane Civil
Society Programme
• Market penetration and diversification
― Scientific Services
― water quality monitoring
― environmental management
― operations and maintenance services
― community capacity building on water quality related issues
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5. STRENGTHENING
SERVICE DELIVERY
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Strengthening service
delivery
• The following water conservation and demand management
measures are implemented by Sedibeng Water:
– An electronic methodology is used to conduct bulk water mass
balance in the Free State region
– Household pre-paid meters are installed and the reticulation
network losses are actively monitored in the North West region
• Sedibeng Water has contained water tariff increases at 6% without
compromising the financial sustainability of the organisation.
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Strengthening service
delivery (Cont.)
• Research on dealing with the varying water quality in the Free
State region is carried out in an attempt to manage increases in
the future
• Sedibeng Water owns a SANAS Accredited Central Laboratory
used for potable and sewage water analysis and tests with a
view of extending these services to municipalities and other
stakeholders
• Sedibeng Water has entered into different contracts with a
number of municipalities for the provision of bulk potable water
and reticulation, and the operation of sewage plants
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Strengthening service
delivery (Cont.)
•
Sedibeng Water assisted Municipalities with the implementation of
refurbishment projects and the transfer of assets
•
The following projects were carried out:
– Basic Water
 Moshaweng LM
 Bophirima DM
– Supply of operators to Phumelela WTW
– Sanitation
 Refurbishment of Warden WTW
 Refurbishment of Memel STW & WTW
 Bulk Sewer Upgrading: Warden
R4.65m
R3.69m
R0.33m
R0.21m
R0.43m
R2.26m
Total Cost R11.57 million
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Strengthening service delivery
(Cont.)
• Cost reduction in operational expenses ( energy,
chemicals and procurement) and the settlement of
long term debt
• Continuously pursuing enhancement of relations with
WSAs and DWAF
• Appointment as implementing agent in the provision
of basic water and sanitation services and training
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Strengthening service delivery
(Cont.)
• Assisting the WSA’s in accelerated service delivery
through Project Consolidate
• Participation in water sector forums and other
stakeholder relationship management initiatives that
addresses accelerated service delivery
• Acceleration of transformation and equity/gender
balance
• Dedicated focus on training and development
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6. STRATEGIC
CHALLENGES
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Strategic challenges
• Obtaining support from DWAF to maintain raw water tariff
increases below inflation in line with water boards potable
water tariff increases
• Concluding multi- year water tariff agreements with
stakeholders
• Raw water deterioration at the middle and lower Vaal River
• Renewal of the WSA/WSP Service Level Agreements
• Managing the uncertainty created by the institutional
reform process
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Strategic challenges
(Cont.)
• Manage relationship with municipalities to jointly
deal with accelerated service delivery challenges
• Augmentation of water supply infrastructure to
Maquassi Hills Local Municipality
• Continuously ensure that potable water quality in
the North West region meet required standards
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Strategic challenges
(Cont.)
• Successfully managing the impact of HIV/AIDS
• Accelerating transformation efforts to balance
gender and disability
• Maintaining and improving employee and
customer satisfaction
• Maintaining water tariff increases at inflation
target levels and still remain sustainable
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7. FINANCIAL
PERFORMANCE
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Financial Overview for the previous five years
Consolidated Abridged Income Statement
Description
2006
2005
2004
2003
2002
(Rm)
(Rm)
(Rm)
(Rm)
(Rm)
Revenue
283,782
278,865
257,411
236,631
193,467
Cost of Sales
98,840
91,025
90,495
72,485
60,707
Gross Surplus
184,942
187,840
166,916
164,146
132,760
Operating Costs
167,924
184,639
157,772
135,514
122,713
Net operating Surplus
17,018
3,201
9,144
28,632
10,047
Net Finance Charges
15,278
19,058
35,758
37,374
39,558
Net Surplus Before
Subsidies
1,740
(15,857)
(26,614)
(8,742)
(29,511)
Subsidies
26,527
33,471
39,677
37,270
46,164
Net Surplus After
Subsidies
28,267
17,614
13,063
28,528
16,653
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Financial Overview 2005/2006
Income Statement – Free State Region
Description
2006
2005
(Rm)
(Rm)
Revenue
235,399
222,539
5.78%
Cost of Sales
107,044
103,456
3.47%
Gross Surplus
128,355
119,083
7.79%
780
292
167.12%
Other Income
4,273
5,754
-25.74%
Operating Costs
82,773
76,467
8.25%
Net operating Surplus
50,635
48,662
4.05%
Net Finance Charges
15,314
19,214
-20.30%
Net Surplus/(Loss) for the year
35,321
29,448
19.94%
Government Grant
Percentage
Variance
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Financial Overview 2005/2006
Income Statement – North West Region
Description
2006
2005
(Rm)
(Rm)
Revenue
35,700
23,841
49.74%
Cost of Sales
11,170
7,142
56.40%
Gross Surplus
24,530
16,700
46.89%
Government Grant
20,094
25,638
-21.62%
Other Income
2,451
1,309
87.24%
Operating Costs
50,651
47,899
5.75%
Net operating (Loss)
(3,576)
(4,252)
-15.60%
Net Finance Charges
28
48
-71.43%
(3,548)
(4,204)
-15.60%
Net Surplus/(Loss) for the year
Percentage
Variance
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GRAPH: Financial Performance
R’000
300,000
250,000
200,000
150,000
100,000
50,000
0
-50,000
2006
Revenue
Operating Costs
Net Surplus Before Subsidies
2005
2004
Cost of Sales
Net operating Surplus
Net Surplus After Subsidies
2003
2002
Gross Surplus
Net Finance Charges
34
Consolidated Abridged Balance Sheet
Description
2006
(Rm)
2005
(Rm)
Percentage Variance
Non-Current Assets
448,202
437,104
2.55%
Current Assets
120,870
108,931
10.96%
Total Assets
569,072
546,035
4.22%
Equity
243,657
211,940
14.97%
Non-Current Liabilities
250,638
257,272
-2.58%
Current Liabilities
74,477
76,823
-3.05%
Total Equity & Liabilities
569,072
546,035
4.22%
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Financial Ratio Analysis
2006
2005
2004
2003
2002
0.99
1.13
0.01
0.96
1.11
0.02
0.88
1.04
0.06
0.95
1.17
0.02
Profitability
Working ratio
Operating ratio
Rate of return on assets
0.94
1.08
0.03
Assets turnover ratio
0.48
0.48
0.46
0.46
0.41
Surplus margin ratio
0.01
-0.11
-0.10
-0.04
-0.15
98.40
98.60
85.60
122.10
109.90
3.78
3.75
4.37
3.03
3.44
1.62
1.42
1.45
1.28
1.17
Debt service/Interest cover ratio
1.11
0.09
0.26
0.77
0.26
Long term debt ratio
0.49
0.52
0.49
0.59
0.65
Debt equity ratio
1.33
1.58
1.43
1.99
2.29
Debtors collection period in days
Accounts Receivable turnover
Short-Term Liquidity
Current Ratio
Long Term Solvency
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FREE STATE REGION: Business Performance Indicators
Expenses as a % of total turnover
Description
2006
2005
2004
2003
2002
235,399
222,540
207,866
192,534
170,306
Water Purchases
36.59
38.48
40.06
34.64
32.19
Electricity Purchases
4.40
4.53
5.31
5.14
4.35
Salaries & Wages
18.52
16.70
15.79
13.18
16.00
Maintenance
4.87
6.41
6.09
6.45
5.44
Finance Costs
14.10
15.67
17.51
20.01
23.67
Total Turnover (Rm)
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NORTH WEST REGION: Business Performance Indicators
Expenses as a % of total turnover including subsidies received
Description
2006
2005
2004
2003
2002
Total Turnover (Rm)
58,596
50,858
46,761
44,722
29,325
Water Purchases
16.32
10.61
15.45
12.94
20.06
Electricity Purchases
2.14
2.82
2.69
1.93
2.54
Salaries & Wages
48.05
49.26
47.65
39.75
56.20
Maintenance
9.31
19.32
16.15
13.59
20.86
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Sedibeng Water obtained an
unqualified audit
opinion again
THANK YOU
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