Ghana Water Company Limited (GWCL) posted a net loss of GH¢938.83 million in 2020, the 2020 State Ownership report has stated.
This represents a 64.17% improvement on net loss of GH¢2.620 billion posted in 2019. Net profit margin was negative 70.02% in 2020.
Revenue however increased by 44.83%, from GH¢925.82 million in 2019 to GH¢1.340 billion in 2020. Total revenue increased by an average of 34 percent per annum between 2016 and 2020.
Revenue from operations (sale of water) increased by 45.09% from GH¢901.96 million in 2019 to GH¢1.308 billion in 2020. This was on account of a 56.82%t increase in sale of water to private customers.
Direct cost was estimated at GH¢1.444 billion in 2020, representing a 13.89% increase from GH¢1.268 billion in 2019. The increase in direct cost was mainly on account of a 47.34% increase in distribution costs.
The report pointed out that “it must be a matter of concern that the direct cost has consistently exceeded revenue by an average of 8% between 2017 and 2020.
In terms of stability of the business, the report said GWCL’s current ratios were 0.48 and 0.59 in 2019 and 2020 respectively.
Although there is an 11-basis point improvement in the ratio, the company’s liquidity position remains precarious and underscores its difficulty in meeting short-term obligations.
Key operational results
GWCL exceeded most targets set for the year 2020 due to the government’s free water supply policy.
For instance, raw water abstracted in 2020 was 344Mm3 exceeding a target of 328 Mm3.
Again, water produced in 2020 was 325 million cubic meters (Mm3) compared to the target of 312 million cubic meters of water tariffs.
The collection ratio of water was estimated at 86.2% against a target of 97%.
Source: Business Analyst
