Manukau Water Ltd Beats Forecast By $1.7M

A better than forecast financial performance in the 30 June, 2009 financial year has enabled Manukau Water Ltd to hold its prices and in some cases reduce them, the company announced today.

Chairman James Hill said that the company’s loss of $1.89 million for the year was lower than the budgeted figure of $3.57 million, and less than the 2008 loss of $2.0 million.

Manukau Water Limited does not operate for the purpose of operating a profit, but is required to recover its operating costs while providing for future projects.

Mr Hill said the latest result is particularly pleasing as the company had experienced a dramatic constriction of economic conditions during the year, but this had been offset by a programme of cost reduction and rigorous cash flow management.

Despite the accounting loss, the company finished the year with a positive cash position of $18.26 million.

“We are very pleased with the improving performance each year by Manukau Water Limited as a Council Controlled Organisation (CCO),” Mr Hill said.

“Our Statement of Intent (SOI) requires us to prioritise the delivery of efficient service and best prices over profit, and to have achieved such a modest operating loss during a period of rapid economic deterioration is remarkable”.

“We are proud of the fact that due to our cost efficiency Manukau Water Ltd customers enjoy on average the lowest water and wastewater prices in the Auckland region, while we are continuing to invest in future water and wastewater infrastructure projects,” he said.

Mr Hill said underlying water demand reflected the economic slowdown more sharply with water demand trending below budget by about 3 per cent and below the previous year’s demand by 4 per cent.

There had been a significant reduction in the level of new development work in Manukau which impacted on new connections.

Mr Hill also announced that as a result of its strong financial position and balance sheet Manukau Water Ltd is able to proceed with its Kawakawa Bay wastewater treatment project, which has an estimated cost of $29 million.

“It is gratifying that our financial position has enabled us to finally get on with this project and resolve a very long standing environmental problem in the Bay”.

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. Manukau Water Limited does not operate for the purpose of making a profit, but it is required to recover its costs from customers. For the next financial year the company is forecasting a loss, mainly due to investment in new infrastructure.