Umngeni-Uthukela Water reports sharp drop in profit due to municipalities’ unpaid bills

UMNGENI-Uthukela Water, the government-owned water authority serving KwaZulu-Natal, has reported a substantial fall in profits for the six-month period ending December 31, 2024, citing substantial increases in expected credit losses as the primary culprit.

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The authority’s profit shrank to R592.57 million, sharply down from R1.814 billion during the same period the previous year, according to the interim results that were released Tuesday. This continuous decline has raised concerns over the promise of municipalities fulfilling their payment obligations for water services.

In the results, the company revealed a revenue increase of 17%, reaching R3.84bn, largely buoyed by sales volume growth and the government-sanctioned tariff hikes made for the possible fiscal year 2024/25.

Despite these gains, gross profit remained nearly static, recording mini-mal growth from R1.93bn to R1.98bn year-on-year.