Water Corp’s flood of cash

Water Corporation has revealed an $809 million surplus in the 2020 financial year, potentially propping up the state budget despite a national recession.

That surplus was $18 million higher than the previous financial year, according to the enterprise’s annual report.

Revenue was up 3.3 per cent, at nearly $2.9 billion.

“Our surplus for 2019-20 was driven by solid revenue from our core activities,” the report said. 

“Lower levels of land development and building activity reduced our outgoing costs, which reflected the subdued economic conditions of the year.

“Excluding the impact of development activity, total revenue increased by 4 per cent during the year, primarily due to a rise in water consumption, service charges, and higher operating subsidies received from the WA Government for the provision of non-profitable services.

Operating subsidies from the state government were up $11 million to $431 million.

Despite the big surplus, returns to the government were limited because the enterprise’s interim dividend was deferred during COVID-19.

Only $4 million of dividends were paid in the financial year.

But directors had since proposed a dividend of $642 million to be paid before the end of the year.

The announcement comes as Water Minister Dave Kelly appointed Ross Love as chair of the Water Corporation board. 

Mr Love spent 25 years in leadership roles with Boston Consulting Group in Australia and New York. 

He is chair of Fremantle Ports and a board member of the Western Australian Regional Development Trust. 

He replaces David Lock, who served as interim chair after Mike Hollett resigned in January, just two months after being reappointed to the role. 

Mr Lock will remain on the board as deputy chair.