Post on 04-Jan-2016
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Presentation to Parliamentary Presentation to Parliamentary Portfolio Committee on Water Portfolio Committee on Water
Affairs and ForestryAffairs and Forestry
LEPELLE NORTHERN WATER
19th MARCH 2007
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STRUCTURE OF STRUCTURE OF PRESENTATIONPRESENTATION
•Area of supply
•Background
•Achievements
•Market development
•Challenges
• Way forward
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AREA OF SUPPLYAREA OF SUPPLY
The Board will be expanding into all Water
Service Authorities – to capture 100% market share
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AREA OF SUPPLYAREA OF SUPPLY Cont… Cont…
SCHEME NAME SOURCE CUSTOMER CAPACITY
Phalaborwa Lepelle (Olifants) River Ba-Phalaborwa Municipality. Mines.
150 ML/Day
Politsi Makgobaskloof Dam Greater Letaba Municipality.
7 ML/Day
Modjadji Modjadji Dam Greater Letaba Municipality.
3 ML/Day
Nkowankowa Letaba River Tzaneen Municipality 24 ML/Day
Ebenezer Ebenezer Dam Tzaneen Municipality. Polokwane Municipality
48 ML/Day
Olifantspoort Lepelle (Olifants) River Polokwane Municipality. Capricorn District.
30 ML/Day
Doorndraai Doorndraai Dam Mokgalakwena Municipality.
12 ML/Day
Flag Boshielo Flag Boshielo Dam Greater Sekhukhune 8 ML/Day
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BackgroundBackground(Recent appointments)(Recent appointments)
• New board appointed in December 2006• CE appointed Feb 2007• CFO appointed March 2007• Recruitment of GM Operations to be
finalised April 2007
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ACHIEVEMENTSACHIEVEMENTS
Financial Performance
2004
R’000
2005
R’000
2006
R’000
Revenue 159,757 159,761 179,656
Cost of Sales
27,956 26,789 41,684
Operating expenditure
64,169 63,414 73,386
Surplus for the year
37,064 45,314 73,942
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ACHIEVEMENTSACHIEVEMENTS
Financial Performance
2004
R’000
2005
R’000
2006
R’000
Net interest paid
20,364 7,113 (15,804)
Accumulated reserves
(24,236) (5,064) 50,460
Long term loans
297,477 274,478 44,491
Average tariff
1,919 2,072 2,163
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ACHIEVEMENTSACHIEVEMENTS
Business Performance
2004
Actual
2005
Actual
2006
Actual
Gross Margin %
83% 83% 77%
Current Ratio
1.84 1.74 2.11
Return on Assets %
9.1% 9.1% 10.0%
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ACHIEVEMENTSACHIEVEMENTS
Business Performance
2004
Actual
2005
Actual
2006
Actual
Debt-equity ratio
116.6% 102.5% 39.9%
Asset turnover
0.21 0.21 0.28
WACC % 20.4% 24.0% 42.3%
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MARKET DEVELOPMENTMARKET DEVELOPMENT
WATER SERVICE AUTHORITY % MARKET STATUS
Capricorn District Municipality 14% Negotiations are at an advanced stage. Conclusion by January 2007.
Polokwane Local Municipality 10% Agreement of 25 years has been entered into on 01 February 2005
Mopani District Municipality 22% Negotiations are at an advanced stage. Conclusion by March 2007.
Greater Sekukhune District Municipality
22% Appointment has been confirmed, finalizing the term of the contract.
Vhembe District Municipality 25% Negotiations are at an advanced stage. Conclusion by January 2007.
Mokgalakwena Local Municipality 6% Agreement of 30 years has been entered into on 01 May 2003.
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CHALLENGESCHALLENGES
- Rehabilitation and refurbishment of infrastructure.- Continuous increase in demand for water.- Outstanding debts (Ba-Phalaborwa) - Protracted section 78 process- Capacity constraints
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WAY FORWARDWAY FORWARD
- Improved governance- Improvement and expansion of infrastructure- Implement turn-around strategy for Ba-Phalaborwa- Finalise population of the structure- Finalise outstanding Service Level Agreements with
WSA’s- Improve relations with all stakeholders in the sector
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THANK YOU