Tuesday, October 27, 2020

WUC profit falls

Water Utilities Corporation’s profit has fallen by more than half, with the state-owned enterprise owed nearly a billion pula in unpaid bills, including by government departments and agencies, forcing the organisation to write off hundreds of millions as bad debts.

According to WUC’s financials for the year ended March 2020 which were made public this week, revenue from provision of water services slowed to P1.8 billion while expenses spiked to P1.9 billion, leaving the organisation with an operating loss of P105.9 million compared to the operating profit of P208.9 million last year March.

The loss was wiped by a P147.4 million cash grant from the government, resulting in a new operating profit of P41.4 million. WUC’s bottom line was also strengthened by P89.4 million from investment returns, and after paying off a portion of borrowings, the water monopoly delivered a profit before tax of P104.2 million, nearly 55 percent lower than the P230.7 million profit earned last year.

WUC is owned P801 million in unpaid bills, with households leading in defaults, accounting for P459 million, while government departments and council owe P233.2 million and businesses are yet to settle their P108 million payment. From the outstanding amounts, the corporation has written off P462 million as impairments, which are bills which are likely not to be paid. After accounting for the credit impairments, WUC is still owed a hefty bill of P339 million.

WUC has had troubles in collecting unpaid bills from customers, at times facing criticism for its irregular billing system that can have wild variations. The parastatal has received nearly P600 million in government subvention in the last five years. In total, WUC has received P3.1 billion in government grants over the years,

Though it continues to receive grants from the government, WUC has cash and liquid investments valued at P2 billion, which has been invested in short term deposits and investments with maturity period of three months.

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The Telegraph October 28

Digital edition of The Telegraph, October 28, 2020.