RAND WATER ANNUAL REPORT 2023

HOW WE CREATE VALUE

Rand Water’s liquidity position continues to remain resilient and demonstrates the Group’s ability to remain financially sustainable and continue as a going concern. Rand Water reported a solid and positive liquidity shown by cash and cash equivalents of R4.897 million (FY2022: R4.913 million) supported by committed facilities headroom of R1.250 million (FY2022: R1.000 million) as part of the Group’s multi-banking strategy and constant growth in the Net Position of R3.327 million (FY2022: R2.818 million). The Group maintained a liquidity buffer of R1.900 million for the financial year consisting of strategic investment in bonds of R2.116 million and short-term investments in the money market. The Group’s funding position remains healthy as the gearing ratio improved to 12% (FY2022: 14%) which is well below the threshold of 50% as prescribed in the National Treasury Borrowing Limit Approval. The Group have fully set aside funds for the ultimate redemption of RW23 bond maturing in December 2023 and has averted refinancing risk as financial risk management is at the centre of Rand Water’s operations.

The Group’s borrowings remained unchanged at R4.4 billion (FY2022: R4.4 billion).

It is Rand Water’s strategy to utilise the DMTN programme for funding external requirements when the need arises, and the funding needs consist of a mixture of bilateral long-dated loans from development finance and banking institutions. All the notes issued by the Group were on the back of the strength of Rand Water’s Balance Sheet.

The Group’s capital expenditure was funded internally from cash generated during the financial year.

Rand Water was the first State-owned entity in Africa to issue sustainability-linked notes being the RWL 26 and RWL 28 bonds. Asset/ Liability Risk Management Rand Water’s asset and liability management amongst other things, consists of managing the financial obligations arising from the Post-Retirement Medical Benefit and the obligation to restore, rehabilitate the Panfontein Sludge Disposal sites. The Group reported a zero amount (FY2022: R366 million) for the Post-Retirement Medical Benefit liability mainly due to asset ceiling that was applied by actuaries as result of the planned asset being ring-fenced for the Post-Retirement Medical Benefit. The Post-Retirement Medical Benefit Obligation (R336 million) is assessed annually by independent actuaries and the related assets amounted to R336 million after applying the asset ceiling of R17 million.

Post Retirement Medical Benefit/Obligation

Panfontein Asset/Liability

Liability R336 Million 2022: R366 Million

Liability R100 Million 2022: R103 Million

Assets R336 Million 2022: R343 Million

Assets Portion of the Zwartkopjes farmland pledged as security

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