In 2010-11, South East Water recorded an operating profit before tax of $95.4 million, consistent with the previous year. Overall, water price increases were more than offset by the effect of abnormal weather conditions which reduced water sales and increased sewage treatment costs.
Financial performance |
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Despite this, the business has continued to realise productivity and efficiency savings which has allowed us to keep operating costs to a minimum. However, bulk water and sewage treatment costs have continued to rise as a proportion of total revenue in line with significant capital investment in major water and sewerage infrastructure.
Dividends
Dividends relating to 2010-11 and payable to the Victorian Government totalled $33.9 million (compared to $38.7 million last year).
Capital investment
Our capital investment of $163.1 million was largely driven by growth-related capital expenditure such as network augmentation, sewage treatment plant upgrades, backlog sewer and water recycling programs.
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Our capital investment in 2010-11 was the largest in South East Water's history. |
Significant capital investments in 2010-11 included:
- Water and sewer main renewal ($30 million)
- Somers Recycled Water Project ($12 million)
- Somers Sewage Treatment Plant ($4 million)
- Pakenham to Narre Warren Sewage Transfer Scheme ($25 million)
- Pakenham Recycled Water Treatment Plant ($5 million)
- Rye Coastal Sewerage Scheme ($3 million)
- Program to connect households in Belgrave South to our sewerage network ($8 million)
Looking ahead
South East Water’s financial performance, cash flows and financial position are expected to remain sound over the coming years. Water prices have been set until the year ending 30 June 2013, which will ensure sufficient revenue to meet operating and capital requirements. We will nevertheless continue to seek further efficiencies and create value for all of our stakeholders.