We have to balance our objectives to protect public health and the environment while providing affordable services and return to Shareholders. The challenge is to do this while continuing to achieve business efficiency.
As a state owned corporation, we are required to operate as efficiently as any comparable business and maximise the net worth of the State’s investment.
During 2011–12, our profit after tax was $367 million, $95 million above the Statement of Corporate Intent (SCI) target of $272 million. This was a result of higher income ($314 million), mostly from the gain on refinancing Sydney Desalination Plant Pty Limited (SDP), but also higher capital contributions from developers. Operating expenditure was $19 million below budget, driven mostly by lower contractor costs and labour efficiencies.
How are we tracking?
Indicator: Net profit after tax (versus Statement of Corporate Intent)
Sydney Water’s Board agrees on a Statement of Corporate Intent (SCI) each year with the NSW Premier and Treasurer. The SCI includes key business objectives, commercial performance and income targets, operational expenditure and capital investment. The SCI forms the basis of our yearly budget.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the year were $1,467 million, $280 million above the SCI target of $1,187 million. Profit after tax for 2011–12 was $367 million, $95 million above the SCI target of $272 million.
Our profit improved from refinancing SDP, higher capital contributions from developers and lower core operating costs. These variances were partially offset by higher depreciation, finance costs and income tax expense.
Table 46 – Profit and loss statement 2008–09 to 2011–12
*Favourable variance to SCI.
#Unfavourable variance to SCI.