Rand Water | Integrated Annual Report 2025

RETURN ON ASSETS, TOTAL ASSETS, AND CASH RESILIENCE Our performance continues to endure through rising costs, volume pressure, and front-line capital deployment. Return on average assets is a modest 9.0% (2024: 9.9%), reflecting an inflationary cost environment, volume declines, increased cash investments and substantial capital expenditure to safeguard asset integrity and unlock future revenue growth. This disciplined trade-off demonstrates prudent risk-taking and a focus on sustainable value creation, even as near-term momentum is tempered by macro and operational headwinds.

Average Cost of Capital and Return on Assets

10,18%

10,21%

9,47%

9,90%

9,47%

9,00%

9,47%

8,3%

7,4%

6,24%

2024

2025

2021

2022

2023

Average Cost of Capital

Return on Assets

TOTAL ASSETS AND NON-CURRENT ASSET MOMENTUM Total assets grew by 15% year on year, reinforcing our capacity to fund renewal, expansion, and strategic capital investment initiatives. Non-current assets increased by 11%, driven by an accelerated CAPEX programme focused on future revenue generating assets and on operational reliability enhancements. We continue to advance assets under construction, bringing

them into productive use and translating capex into lasting service continuity and value. ASSET USE, EFFICIENCY, AND RENEWAL DECISIONING

Optimal asset utilisation and rigorous asset-efficiency management remain central to our strategy. These disciplines guide augmentation, renewal, and the grounded execution of capital projects. By prioritising reliability and integrity, we can undertake these projects through planned outages and strengthen service delivery in the face of demand variability and climate volatility. INFRASTRUCTURE IMPROVEMENTS AND WATER STEWARDSHIP Investments in existing infrastructure renovations aim to curb non-revenue water and bolster reliability. Despite challenges in demand management, proactive measures, including water conservation policies and climate-resilient practices, remain at the forefront of our resource stewardship. Our commitment to responsible water management underpins sustainable use and long-term resilience. LIQUIDITY AND CASH GENERATION In the current financial year, financial assets contributed significantly to our income generation, with a remarkable 92% growth in cash and cash equivalents. This uplift reflects robust cash generation from operations and the value of strategic investments that bolster the bottom line, reinforcing our ability to fund ongoing capital programmes, manage debt prudently, and weather external shocks.

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Rand Water | Integrated Annual Report 2025