Rand Water | Integrated Annual Report 2025

INTEGRATED ANNUAL REPO

GROUP CHIEF FINANCIAL OFFICER’S REPORT

Resilience is built not in calm waters, but through the storms that test our foundation.

Ms. Matshidiso Nyembe Group Chief Financial Officer

This year, Rand Water’s story is one of remaining resilient and holding firm through headwinds, adapting with purpose, and advancing with discipline. In a context marked by political transition in South Africa, decelerating economic growth, inflationary risks, volatile energy costs, and tightening municipal liquidity, we remained anchored to our strategic imperatives, operational integrity, best-fit technology, a high-performance culture, positive stakeholder engagement, sustainable growth, and sustainable financial health. With financial capital preservation at the centre, we executed with prudence and intent,

delivering quality outcomes and protecting value for our stakeholders. INTERNAL RESILIENCE AND STRATEGIC FOCUS

Our internal environment remained stable and mission driven. We deepened operational discipline, sharpened cost visibility, and reinforced governance over capital deployment. Our risk posture was recalibrated to balance near-term pressures with long-term horizon investments, ensuring funding, liquidity, and asset management decisions fortified the balance sheet while enabling critical infrastructure delivery. We fostered a performance culture that rewards accountability and innovation. EXTERNAL HEADWINDS, TRUSTED PARTNERSHIPS Externally, subdued growth in domestic product (GDP), upside inflationary risks, and rising electricity costs strained households and businesses. Collaboration with our Shareholder remained strong as we engaged the National and Provincial Governments to address unprecedented debtor days and broader fiscal pressures facing the municipal sector. These partnerships are vital to stabilising collections and protecting the sustainability of bulk water services. Despite these pressures, operations generated strong free cash flows, reflecting disciplined working capital management. STRATEGIC RESILIENCE THROUGH OPERATIONAL EFFICIENCY Efficiency sits at the centre of our operating model to unlock durable margin resilience. Focused interventions to manage chemicals and energy supported an improved contribution margin and cushioned higher Expected Credit Losses (ECL) recognised in line with International Financial Reporting Standards (IFRS), IFRS 9. We intensified maintenance, optimisation, and demand management to safeguard system integrity and service continuity while executing our infrastructure renewal programme amid capacity pressures and climate variability.

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Rand Water | Integrated Annual Report 2025