EWSC reports revenue of E488 million
MBABANE – The financial health of businesses is steadily improving; one such company is the Eswatini Water Services Corporation (EWSC), whose revenue increased by 17 per cent.
This was outlined in the EWSC annual report for 2022. EWSC said the revenue for the year ended March 31, 2022, was E488 million. The operating revenue grew by 17 per cent from E417 million in 2021.
They said the growth was driven by a tariff increase of 6.6 per cent and the recovery in economic activity following the relaxation of COVID-19 lockdown restrictions. An operating expenditure of E418.8 million was recorded, representing an increase of 4.6 per cent compared to last year (E400.4 million). The profit for the year amounted to E104 million. This is 68 per cent more than the profit for 2021 of E61.9 million.
PROfiT
EWSC Managing Director (MD) Jabulile Mashwama said the increase in profit was partly because of austerity measures emanating from COVID-19-related restrictions, which impacted expenses such as training, travel, sports and social activities.
She said reductions in energy costs were another factor that contributed to the bottom line following energy initiatives implemented.
Total assets amounted to E3.34 billion (E2.98 billion in 2021). The increase is attributable to projects completed and recognised in the corporation’s accounts. Total liabilities stood at E2.58 billion (E2.32 billion in 2021).
Mashwama said they continued to function as a going concern despite challenges in the operating environment posed by a number of factors, including the COVID-19 pandemic and the recent social unrest.
She said the impact of COVID-19 and the resultant economic impact took a toll on the corporation as there were challenges in the collection of billed amounts, resulting to the debtors’ book growing due to accumulating arrears.
“The challenges of cash collection on billed amounts put pressure on working capital for sustainable operations,” she added.
Risk
The MD mentioned that the threat of the fifth wave remained a risk in the reporting period as cases were expected to increase in the winter season.
“Ever since the government took a decision to move the COVID-19 restrictions to Adjusted Risk Level 1, businesses and the economy have been on the verge of recovery. Though this phase is dubbed ‘post-COVID-19’, the pandemic is expected to be around in the foreseeable future. Building resilient entities from lessons learned has become critical for future survival,” she added.
When asked about their operations in the south-west region of the country, Mashwama said the region entered the new year with compromised water supplies as raw water supply into the Lavumisa balancing dam was halted.
The halt was emanating from a damaged electric cable at the Jozini Dam supply system.
Networks
Mashwama said this resulted in rationing through the networks and the eventual suspension of water supply in some areas, while residents were supplied through stationary tanks located in strategic areas.
She said it caused increased customer complaints, which were exacerbated by the civil unrest that coincided with it.
“An estimated total increase in costs of E2.1 million was incurred by the region as an outcome of the raw water supply outage. Nhlangano, Mankayane, and Hlatsi water sources were relatively stable during the year, with ‘intermittent floods being the major disturbances,’’ she added.
ESWC outlined that the region installed 903 connections this financial year, resulting in an estimated increase in livelihoods supported of 4 500 people.
A total of 283 connections were made from water supply network extension projects at Mbangweni and Dlovunga, which were supported by World Vision Eswatini. There were 36 new sewer connections made during the year.
The extension of sewer services was not a priority as the existing wastewater treatment plant is overstretched. The focus on sewer extensions will commence upon the completion of the new waste water treatment plant (WWTP) under construction in July 2022. They said total revenue in the south-west region for the year amounted to E58.8 million, which is 16 per cent above the target of E50.6 million. “This positive performance in revenue is due to a 13 per cent increase in billed volumes, which can be attributed to the increased number of connections and water demand by our key customers,” mentions the report.
EWSC said at year-end, debt was at E24.6 million representing a 32 per cent increase from the previous year (E18.6 million). The government and the residential category of customers were the biggest contributors to the regional debt at 45 per cent and 29 per cent respectively.
Increase
They said the collection ratio averaged 86 per cent for the financial year, representing a 10 per cent decline from the previous year. The debtor’s days as of March 31, 2022 were 154, an increase of 18 days from the previous year.
“Efforts to recover the debt include a debt recovery programme, which is currently being implemented following the adequacy analysis for metre readers and disconnectors,” reads the report.