Water services supplier Water Corporation has posted a surplus of almost $1 billion amid improved revenue off the back of increased service charges.
Water services supplier Water Corporation has posted a surplus of almost $1 billion amid improved revenue off the back of increased service charges.
Water Corp’s operating business generated a surplus of $946.8 million for the 2022-23 financial year and total revenue of $3.3 billion, up six per cent from the previous year.
But it paid lower returns to the state government of $195.9 million for the period.
The state-owned entity said the lower dividends came off the back of the government’s decision for Water Corp to retain interim dividends to help fund the Alkimos Seawater Desalination Plant.
It comes after the $1.6 billion Alkimos desalination plant, expected to produce 100 gigalitres of drinking water per year, was approved by the Joint Development Assessment Panel last week.
Water Corp attributed its revenue to a rise in service charges, water consumption and higher operating subsidies received from the government for the provision of non-profitable services.
“Our surplus for 2022-23 was influenced by solid revenue receipts from our core activities, combined with higher levels of land development and building activity,” the report read.
“This is due to a state economy that continues to perform strongly, with strong population growth leveraging off the federal and state governments’ policies designed to drive economic activity in the residential building industry.
Total expenditure increased by 8.5 per cent to $2 billion for the financial year, which Water Corp said reflected to cost of operating and maintaining its ageing and increasing infrastructure.
New capital investment for 2022-23 totaled $745 million across 18 projects, namely upgrades to the Mandurah water resource recovery facility and a new water treatment plant in Meekatharra.
“The rise encompassed the effects of inflation on materials and services, a labour market with intense competition, elevated borrowing costs due to interest rate hikes by the Reserve Bank of Australia throughout the year, and increased depreciation for infrastructure and technology assets,” Water Corp said.
“Our total cost per property increased by 4.0 per cent and our operating costs per property increased by 6.1 per cent.
“Despite these rises we remain one of the lowest cost businesses in the Australian water industry for large scale supply.”
Chair Ross Love said Water Corp had remained resilient through natural disasters, supply chain shortages, and challenges brought about by climate change and a growing population.
“With the support of the State Government, we actively pursued investment in rainfall independent water sources and played our part in helping to position WA as a frontrunner in the creation of renewable energy sources,” he wrote in the report.
“I’m proud to also share the early success of our strategic plan, highlighted by progress made to date on Perth’s next major water source – a proposed seawater desalination plant in Alkimos.
“To meet the plant’s clean energy requirements, and those of our existing desalination plants, we are working to competitively procure up to 400 megawatts of additional renewable energy, reflecting our commitment towards net zero greenhouse gas emissions by 2035.”
During the financial year, Water Corp locked into the development rights for the Flat Rocks wind farm stage two near Kojonup, lending to its net zero greenhouse gas emissions by 2035 target.
Chief executive Pat Donovan said wind farms weren’t the only frontier the organisation was pursuing.
“We have begun investigating new commercial opportunities, as well as research and development in circular economy initiatives to better the environmental, social, and economic outcomes for the state,” he wrote in the report.
