RAND WATER ANNUAL REPORT 2023

OUR FINANCIAL CAPITAL

Equity Capital The accumulated reserve continues a positive trajectory primarily attributable to the strong financial performance denoted by the net profit of R3.5bn attained in the current year. Working Capital Working Capital is a key strategic financial capital that is managed through close stakeholder and customer relationship management. Rand Water’s greatest working capital item is accounts receivables, which has significantly grown over the years as municipalities fall into financial distress. External stakeholder engagements, customer arrangements as well as inter-ministerial engagements have created collaborative platforms with each key customer. Collaborative efforts have been undertaken with the Department of Water and Sanitation as well as the National Treasury to find solutions that will aid municipalities to pay their accounts when they are due. The management of cash is monitored closely with opportunities of investments identified and exploited to yield interest income. In the 2022/23 Financial Year, finance income increased by a 55.5% benefiting from cash investments and the recent interest hikes. The Finance Plan is re-evaluated annually to assess periods requiring cash injections, where they will trigger, debt will be raised, but most importantly, where redemptions are approaching, redemption reserves are built up in cash well in advance to ensure Rand Water is able to pay back its obligations when they fall due.

Our financial capital is our equity, working capital and debt funding from investors, and any monetary funds that we use for productive and developmental purposes. OUR FINANCIAL CAPITAL

R35.7 billion capital and reserves

R4.4 billion of debt through bond issuance

R4.9 billion cash and cash equivalents

R3.5 billion net profit

Rand Water uses both Equity and Debt to fund and create value through augmentation and renewal of our infrastructure (Manufactured Capital), our most significant being our 3 660km pipeline infrastructure. Rand Water’s infrastructure enables the organisation to provide value to its customers which is affordable high-quality water.

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