Mhlathuze Water to pour R800m into capex
DURBAN - KWAZULU-NATAL water utility Mhlathuze Water said yesterday that it would spend R800 million on capex investment over the next five years.
The entity, whose services include untreated, purified and clarified water supply disposal of industrial and domestic waste water and scientific services, reported that it grew its net surplus from R103 million to R136m in the current period 2019/20 in the face of the Covid-19 pandemic.
The figures were revealed during the entity’s 2020 audit outcome in a media briefing held in Durban yesterday.
Mhlathuze Water chief executive Mthokozisi Duze said Mhlathuze Water would be involved in many of the future projects.
It had signed off-take agreements with many companies in that region within the Richards Bay industrial Development Zone area.
“We are upgrading our treatment facilities and in the next five years, in terms of our business plan, we will be spending almost R800 million through capex, which has to do a lot of capital infrastructure improvement and expansion that we will be putting on the ground. That also has to do with the upgrade in our distribution, so that we are able to meet our contractual responsibilities entered into with our clients, while creating long-term supply to our clients that we have currently,” said Duze.
Mhlathuze Water said there were projects the entity had to complete with the Department of Water and Sanitation (DWS) in the Zululand District, which were stalled due to budget reprioritisation. Duze said discussions were continuing with DWS to avail the budget to complete these projects so that they could be handed over to the district.
Mhlathuze Water’s Thokozani Hlongwane said even though the water entity’s revenue was down due to Covid-19, it had managed to increase its net surplus from R103m to R136m.
“Gross profit 2015 was 73 percent and in 2020 it is 64 percent. On our debtors collection (the time taken to collect debt) in 2015 it was 50 days and in 2020 it dropped to 38 days. The net profit margin in 2015 was increased from 21 percent to 23 percent,” Hlongwane said. In the 2016/17 audit outcome, Mhlathuze Water had a qualified opinion, and in 2020 it had an unqualified opinion without material findings. Duze said the entity had started seeing discernible progress with the installation of the current Board of Directors in December 2018.
“The journey has been long, and at times back-breaking. One of the first things that the new board did in implementing a turnaround for Mhlathuze Water was to put in place effective board committees which immediately got to work attacking the reasons for our poor audit outcomes and which included, inter alia, fruitless, wasteful and irregular expenditure,” said Duze.
He conceded that their entity was an organisation bedevilled by instances of impropriety and financial misconduct in the past. But he said that now lay in the past as the entity had taken a hard line stance to discipline errant staff members elevating all identified cases of misconduct to law enforcement authorities and blacklisting unscrupulous suppliers .
He said the entity was poised to play an increasingly important role in the rapidly industrialising Richards Bay node, one of two such KZN zones.