Financial performance

Our financial performance for the year was strong with a year-end profit before tax of $99.2 million which was

$29.8 million higher than budget.

Revenue was $54.8 million higher than budget predominantly due to:

• strong water sales due to warm and dry weather conditions throughout the year
• significant contributed assets arising from mains extensions contributions, infrastructure assets gifted to us from developers and capital contributions to us for work we perform, as a result of increased development activities across the state
• profit on sale of surplus assets

Total expenses were $25 million higher than budget predominately due to:

• production and treatment costs for higher than average water production due to warm and dry weather conditions throughout the year
• transition costs in relation to the new Adelaide Service Delivery contracts for production and treatment and field services
• site decommissioning and site remediation and restoration costs, provision for bushfire preparedness works, and retirement of replaced mains.

These increased expenses were offset by:

• reductions in interest and debt management costs due to a focus on debt management strategies to mitigate interest rate risk and minimise interest expense, including debt refinancing at favourable market interest rates
• reductions in electricity expenses through volume-managed purchases from the wholesale energy market and reductions in electricity price
• reductions in operational taxes and external fees and charges.

As a significant revenue contributor to the South Australian government, for the broader benefit of the people of South Australia, an amount of $275.4 million was paid in 2020-21. This saw $72.9 million of business operating expenditure contributed to other government agencies and/or councils. Within interest expense, $94.6 million was paid to the South Australian Financing Authority as guarantee fees and margins. An income tax equivalent of $25.7 million and a dividend of $82.1 million were also paid.

• improved service channels and customer digital experience
• increased technology security and reliability (including cyber security)
• increased business efficiency and employee experience
• innovative technologies such as smart maintenance, underwater robotics and virtual reality.

We continue to focus on improving our water and wastewater infrastructure assets and invest in major infrastructure projects, all of which have a positive impact on our customers and/or the state. In 2020-21 these included:

• Zero Cost Energy Future, with $130.3 million spent, taking the total project spend to $352.9 million of the $368.2 million project
• Happy Valley Health Compliance Upgrade Project, with $11.4 million spent towards the $21.4 million project
• Angle Vale Wastewater Network Augmentation Project, with $10.5 million spent towards the $12.7 million project.

Capital expenditure has been prudent with efficient expenditure through the year. It was contained within the Essential Services Commission of South Australia’s allowable expenditure and/or state budget approvals.