Stakeholder Annual Report Presentation 2005/6Themba Nkabinde

Chief Executive

PROFILE• Largest water utility in Africa

• Bulk Water supply increased to 3457 Ml/d (3426 Ml/d: 2005)

• Supplies 11 million people

• Area of service 18 000 km2

• Additional 13 000 km2 joint area of service with other Water Boards

AREA OF SUPPLY

Consumers - 11 millionArea - 18 001 sq kmTotal Pipelines - 3 400 km

Total Reservoirs - 54

SIGNIFICANT DEVELOPMENTS

• New Minister & DG

• Rand Water Services

• Management restructuring

• Meredale incident

• Redemption of R860m debt

PERFORMANCE HIGHLIGHTS

•RevenueRevenue :: R3 672 millionR3 672 million

•Net incomeNet income : : R 593 million

•Net cash from operating activities : R712 Net cash from operating activities : R712 millionmillion

•Increase in sales volume (3457 Ml/d AADDIncrease in sales volume (3457 Ml/d AADD) )

•Assets : R5,386 bn (R5,705 bn)

19.7%

6.1%

0.9%

0.9%

5,6%

• Staff employed - 3006 (3049)

• Corporate ISO 9001:2000 accredited

• All plants ISO 14001 accredited

1,4%

PERFORMANCE HIGHLIGHTS

•Customer Satisfaction IndexCustomer Satisfaction Index

•Training Spent as a % of payrollTraining Spent as a % of payroll

•Designated Groups at ManagementDesignated Groups at Management

•BEE SpentBEE Spent

8,52%

60,4%

2006 2005

63,2%

79%

PERFORMANCE HIGHLIGHTS

46,8%

60%

8,2%

81%

KPI Unit 2003 2004 2005 2006

Profit Margin % 9,7 12.04 14.29 16.12

Return on Equity % 12.3 14.1 15.5 15.7

Interest Cover 2.8 3.7 5.2 8.4

Return on Assets % 8.9 10.0 10.8 12.5

Credit Rating (CA Ratings) AA AA AA AA

Asset T/O Ratio 1.3 1.2 1.2 1.2

Current Ratio/Quick Ratio 1.5 1.8 0.9 1.4

PERFORMANCE HIGHLIGHTS

SALES

TOTAL RAND WATER SALES 5-YEAR GROWTH

4.60%

6.25%

2.22%

0.39%

0.88%

2,950

3,000

3,050

3,100

3,150

3,200

3,250

3,300

3,350

3,400

3,450

3,500

2001 / 2002 2002 / 2003 2003 / 2004 2004 / 2005 2005 / 2006

FINANCIAL YEAR

TO

TA

L S

AL

ES

- A

AD

D (

Ml/

day)

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

PE

RC

EN

TA

GE

GR

OW

TH

TOTAL RAND WATER SALES (AADD)

PERCENTAGE GROWTH (YEAR ON YEAR)

CUSTOMER SALES PROFILE

Ekhuruleni Metro22.66%

Mines6.71%

Industries1.56%

Emfuleni Metro5.25%

Tshwane Metro14.41%

Other Municipalities12.13%

Greater Johannesburg Metro37.28%

GROSS PROFIT

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2002 2003 2004 2005 2006

Gross Profit

Net Finance Costs: 176 158 144 122 80

RAND WATER PROFITABILITY

0100200300400500600700

2002 Actual 2003 Actual 2004 Actual 2005 Actual 2006 Actual

0

5

10

15

20

Profit for the year (R'm) Profit margin (%)

Annual Report 2005/6 RETURN ON TOTAL ASSETS

7.59

10.2 10.812.5

0

2

4

6

8

10

12

14

2002 2003 2004 2005 2006

Actual %

EMPLOYEE PRODUCTIVITY RATIOS

2003 2004 2005 2006

No. of Employees

3 108 3 097 3 049 3 006

Ml sold 1,216,343 1,252,828 1,259,927 1,279,939

Ml per employee

391 404 413 425

Revenue

R’000

2,884,405 3,258,055 3,460,099 3,672,119

CORPORATE SOCIAL RESPONSIBILITY

Categories 2006 2005 2004

Externally funded projects

R45 770 000 R41 150 000 R14 840 968

Spend on local suppliers

R13 105 810 R10 833 198 N/A

Spend on Local Labour

R8 907 817 R8 290 902 N/A

Female Employed 54% 49.7% N/A

Jobs created 1 389 1 459 648

CORPORATE SOCIAL RESPONSIBILITY

Water and Sanitation

Project Area Value

Gender

M F Total Staff

Winterveldt Pipe Reinforce Winterveldt Areas R5.3m 60% 40% 10

Winterveldt Sanitation Winterveldt (Ward 9,24) R5.5m 64.8% 35.2% 105

R10.8m 115

Alien Plant Removal - Water Conservation

Project Area Value

Gender

M F Total Staff

Alien Plant Removal Mogale City R1.3m 54% 46% 52

Alien Plant Removal Elandsfontein R1.5m 53% 47% 60

Kestell & Fouriesburg Bethlehem Eastern FS R2.0m 59% 41% 61

Caledon & Jordaan Bethlehem Eastern FS R6.3m 41% 59% 130

Qwa Qwa Alien Removal Qwa Qwa Eastern FS R2.5m 48% 52% 298

R13.6m 601

CORPORATE SOCIAL RESPONSIBILITY

Domestic Leaks Repairs - Water Conservation

Project Area Value

Gender

M F Total Staff

Emfuleni Leaks Repairs Emfuleni (Ironsude) R1.9m 29% 71% 35

Tshwane Leaks Phase 2 Mamelodi R1.5m 62% 38% 45

R3.4m 80

Wetland Rehabilitation - Water Conservation

Project Area Value

Gender

M F Total Staff

Blesbokspruit Nigel / Springs R1,0m 31% 69% 54

Siluma View Thokoza R370 46% 54% 26

R1.37m 80

CURRENT INFRASTRUCTURE PROJECTS

• Brakfontein / Hartebeespoort (50 km) pipeline for Brakfontein / Hartebeespoort (50 km) pipeline for R310 million. The EIA approved but subject to R310 million. The EIA approved but subject to appeal appeal

• Projects done in partnership with other stakeholders: Projects done in partnership with other stakeholders: •Western Highveld Region Project for R112 Western Highveld Region Project for R112 million of which R42 million is from Rand million of which R42 million is from Rand Water and the rest from DWAFWater and the rest from DWAF

FUTURE CAPITAL INVESTMENTS

• A total of R2,9 billion capital investment isA total of R2,9 billion capital investment is

planned over the next 5 years:planned over the next 5 years:57% - Augmentation schemes57% - Augmentation schemes43% - Renovations and upgrades43% - Renovations and upgradesOf the total, 80% is on distribution networkOf the total, 80% is on distribution network

FUTURE INFRASTRUCTURE PROJECTS

•Vlakfontein Mamelodi Pipeline Vlakfontein Mamelodi Pipeline - R370 million - R370 million

• Weltevreden Resevoir Weltevreden Resevoir – R60 million– R60 million

• BG3 Pipeline BG3 Pipeline – R180 million– R180 million

• Zwartkopjes-Forest Hill System Zwartkopjes-Forest Hill System – R140 million– R140 million

ORGANISATIONAL TRANSFORMATION

Commercial Equity Spend – 60% 29,1%

Training Spend - 8.5% of payroll

General Management Executive

Female Empowerment

23% 28% 50%

ACI Empowerment

83% 63% 83%

ORGANISATIONAL TRANSFORMATION

Learnerships 20 PWD (LG&W SETA)

PWD 3.9% of total staff

Talent Development 86 bursaries awarded at Tertiary Institutions

Apprenticeship 13 apprentices of which 85% are female

HIV/Aids Programme 1.56% of staff tested positive and are on an “Aid for Aids Programme”

RAND WATER SERVICES (Pty) Ltd

• Ghana involvementGhana involvement

• Pipeline Integrity Management Pipeline Integrity Management

(C&K Joint Venture)(C&K Joint Venture)

• Infrastructure Development FundInfrastructure Development Fund

LOOKING INTO THE FUTURE…….

•Key stakeholder groups:Key stakeholder groups:GovernmentGovernmentCustomersCustomersPartnersPartners

•Programme of engagement:Programme of engagement:ExpectationsExpectationsDelivery agendaDelivery agendaMeet developmental goals meaningfullyMeet developmental goals meaningfully

FUTURE DEVELOPMENT

• Water Demand ManagementWater Demand Management

• Catchment managementCatchment management

• Bulk sanitationBulk sanitation

• NEPAD InitiativesNEPAD Initiatives

• Government engagement to assess expectationsGovernment engagement to assess expectations

Thank You