Manukau Water Limiteds Results Improve

Manukau Water Limited has recorded a substantial improvement in its latest financial half-year results.

 

For the six months to the end of December 2008 the company recorded a loss of just $607,000. This is significantly lower than the $2.5 million loss recorded for the same period a year earlier.

 

The much-improved result means Manukau Water Limited expects to be able largely to absorb an expected rise in wholesale water and wastewater charges. Therefore it will keep changes in its overall prices for its 2009/10 financial year in line with any movement in the consumers' price index.

 

James Hill, chair of Manukau Water Limited, said this will be a major benefit to customers, who already enjoy on average the lowest water and wastewater prices in the Auckland region.

 

At the same time as containing prices, the company is maintaining its investment in water and wastewater infrastructure. Projects like the installation of the Kawakawa Bay wastewater treatment plant and continued upgrades of existing water and wastewater infrastructure will not only ensure Manukau has a world class water and wastewater service, but this investment will provide much needed infrastructure spending at a time when contraction is occurring elsewhere in the economy.

 

Mr Hill noted that, while the half-year performance was good, there is considerable evidence that the economy is continuing to constrict.

 

“The company’s network growth charge and new meter connections were below budget for the half year and this indicates an ongoing downturn in land development and new connections,” Mr Hill noted.

 

Mr Hill said that, although economic conditions are forecast to continue to be difficult over the remainder of the financial year, the company has taken a prudent approach to cost management and ultimately this will minimise any pricing impact for the company’s customers.

 

Manukau Water’s earnings before interest and tax were $3.91 million for the half year. This was $1.48 million more than forecast and $1.77 million more than the company earned in the same period of the 2007/08 financial year.

 

Total revenues for the six months were $46.19 million, which was up from $42.5 million a year earlier.

 

 

 

Raveen Jaduram, chief executive of Manukau Water Limited, said it was particularly pleasing to be able to improve the financial result while encouraging customers to use less water.

 

Water sales for the half year were $17.27 million, which was down on the $17.80 million budgeted for the period.

 

“We continue to believe that transparency of our pricing means our customers are responding by reducing wastage of water. While this results in lower-than-forecast revenue for the company it has a positive impact on the environment and allows us to defer capital investment while maximising the use of our existing assets,” Mr Jaduram said.

 

Manukau Water Limited has a variable water tariff, meaning the less water people use, the less they pay.

 

“Therefore there is an incentive for people to use less water and in difficult economic times this can make a difference to household and business costs,” he said.

 

Mr Jaduram noted that Manukau Water Limited’s finances are healthy, with strong cashflow and a secure balance sheet.

 

“In particular, we have contained our costs and managed our debts to improve cashflow and reduce the need to pass on large increases in our wholesale costs to our customers,” he said. “The work we have done over the past couple of years to streamline our business means we are prepared to cope with these difficult and turbulent times.”

 

About Manukau Water

 

Manukau Water Limited is responsible for the management of the public water distribution and wastewater collection systems for the people of Manukau. The company serves approximately 338,000 people living in an area covering 552 square kilometres. It manages infrastructure assets worth nearly $1 billion.

 

The company was established by its owner, Manukau City Council, as a Council Controlled Organisation (CCO).

 

The Company continues to be fully accountable to its shareholder through ongoing performance measures and targets.

 

Further Information:

 

Mark Reynolds

Communications Manager

Manukau Water Limited

027 2771363

www.manukauwater.co.nz