Rand Water | Integrated Annual Report 2025

INTEGRATED ANNUAL REPO

FINANCIAL STRENGTH AND LIQUIDITY Cash, liquidity, and funding flexing Cash and cash equivalents rose to R12.2 billion as at 30 June 2025, up from R6.3 billion in 2024. This increase reflects the maturity of longer dated term deposits, complemented by prudent debt-management actions and disciplined liquidity governance. To safeguard our financial position, we maintain a well-diversified liquidity buffer, balancing immediate operational needs with investment opportunities in short‑term instruments. The Group’s liquidity buffer stands at R2.2 billion, anchored by strategic bond investments and other short-term placements, supported by committed facilities headroom of R1.5 billion (unchanged from 2024). Funding flexibility and debt management The ZAR 10 Domestic Medium-Term Note (DMTN) programme continues to offer strategic flexibility, with R3.2 billion currently in issue and R6.8 billion in headroom available for future funding needs. Funding requirements are reviewed regularly to ensure timely access to capital when opportunities or constraints arise. As the RWL26 bond nears its redemption window (within 12 months), Rand Water is aligning with its redemption policy to manage refinancing risk and preserve financial endurance. The intention is to redeem the bond at maturity. Key indicators and funding strategy Debt maturity and pricing metrics remain favourable, supported by governance and discipline across financing activities. As at 30 June 2025, the debt-to-equity ratio stood at 7.00% (2024: 7.85%), and the interest cover ratio was 10.48 times (2024: 9.25 times), highlighting a strong credit posture. Our funding strategy harmonises growth, asset renewal, and affordability. It blends internal resources with access to debt capital markets to ensure that the five-year CAPEX plan is funded without compromising service delivery or customer support.

ASSET/ LIABILITY RISK MANAGEMENT Fortifying the foundation for sustainable obligations Rand Water actively stewards its asset and liability exposures to ensure long-term obligations are matched with durable, reliable funding sources. This discipline underpins the Group’s financial soundness and supports ongoing operational continuity across changing conditions. Our approach extends beyond funding, encompassing prudent management of long-term commitments such as post-retirement obligations and the stewardship of rehabilitative responsibilities for legacy sites, including Panfontein Sludge Disposal. Key obligations and funding alignment Defined benefit obligation: As at 30 June 2025, the defined benefit obligation stood at R334 million, a close alignment with plan assets of R334 million after applying the IAS 19 asset ceiling. This structure ensures the obligation is fully funded and does not distort the net position on the balance sheet. Rehabilitation obligations: The provision for rehabilitating the Panfontein Sludge Disposal site was R134 million as at 30 June 2025 (2024: R131 million), with annual reassessments to reflect updated cost estimates and project scopes. Funding for these costs will be drawn from proceeds from the sale of a portion of Zwartkopjes farmland pledged as security, linking asset monetisation to environmental and health safeguards. Funding strategy and governance We maintain a robust funding architecture that synchronises with long-term commitments, using a mix of internal resources and external instruments to ensure affordability and availability of capital when needed. Our governance framework continuously reviews maturity profiles, risk exposures, and affordability to sustain financial flexibility amid market dynamics and regulatory changes. Operational and strategic implications By proactively aligning funding to core obligations, Rand Water strengthens its capacity to meet future environmental and social responsibilities without compromising service delivery or financial health. This careful balance between ongoing obligations and strategic investments enhances stakeholder confidence and positions the organisation to navigate future uncertainties.

Post Retirement Medical Benefit/Obligation

Panfontein Asset/Liability

LIABILITY

LIABILITY

R 100 Million 2024: R 131 Million

R 334 Million 2024: R 330 Million

ASSETS

ASSETS R 334 Million 2024: R 330 Million

Portion of the Zwartkopjies farmland Pledged as security

99

Rand Water | Integrated Annual Report 2025