AS Tallinna Vesi Annual Report '16
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AS Tallinna Vesi Annual Report '16 TALLINNA VESI 2016 3 AS Tallinna Vesi Consolidated Annual and Sustainability Report for the financial year ended 31 december 2016 (Translation of the Estonian original) Beginning of the financial year 1 January 2016 End of the financial year 31 December 2016 Name of the Company AS TALLINNA VESI Legal form of the Company Public limited company Commercial register number 10257326 Address Ädala St.10, Tallinn, Estonia Chairman of the Board Karl Heino Brookes Telephone + 372 6 262 200 Fax + 372 6 262 300 E-mail [email protected] Web-page www.tallinnavesi.ee Field of activity Production, treatment and distribution of water; storm and wastewater disposal and treatment Auditors AS PricewaterhouseCoopers Documents attached to the Annual Report Independent auditor’s report 4 TALLINNA VESI 2016 Table of Contents Our company 5 Effluent quality 50 Note 13. Other contingent liabilities 89 Our performance in 2016 7 Compliance 52 Note 14. Prepayments 90 Operational highlights 2016 7 Corporate governance 54 Note 15. Share capital 90 Financial highlights 2016 8 Risks and uncertainties 64 Note 16. Revenue 91 Chairman’s statement 10 Consolidated financial statements 66 Note 17. Staff costs 92 How we create value 14 Management confirmation 67 Note 18. Cost of goods/services sold, marketing and 92 Our vision and strategy 16 Consolidated statement of financial position 68 administrative expenses Delivery of Objectives 20 Consolidated statement of comprehensive income 69 Note 19. Other income/expenses 93 Delivery of 2016 objectives 20 Consolidated statement of cash flows 70 Note 20. Financial income and expenses 93 2017 objectives 21 Consolidated statement of changes in equity 71 Note 21. Dividends 94 Our performance 22 Notes to the consolidated financial statement 72 Note 22. Earnings per share 94 Economic environment 22 Note 1. General information 72 Note 23. Operating lease 95 Operational results 23 Note 2. Accounting policies 72 Note 24. Related parties 96 Financial results 25 Note 3. Contingent liability regarding the tariff risk 79 Note 25. Subsidiaries 96 Note 26. Supplementary disclosures on the parent Activities of the subsidiary OÜ Watercom 33 Note 4. Critical accounting estimates 79 97 company of the group Social responsibility and sustainability 34 Note 5. Financial risk management 79 Confirmation of the Management and Customers 36 Note 6. Cash and cash equivalents 84 102 Supervisory boards Occupational health and safety 42 Note 7. Trade receivables, accrued income and 84 Independent Limited Assurance Report prepaid expenses 104 Community and public 44 on the Sustainability Information Note 8. Derivatives 85 Investors 45 AS Tallinna Vesi Management Board 112 Note 9. Property, plant and equipment 86 Economic performance 46 AS Tallinna Vesi Supervisory Council 113 Note 10. Intangible assets 87 Partners 46 2016 in Pictures 116 Environment 48 Note 11. Borrowings 88 Sustainable use of water 49 Note 12. Trade and other payables 89 TALLINNA VESI 2016 5 Our company 22,000 customers AS Tallinna Vesi is the largest water utility company in In 2016, the Wastewater Treatment Plant treated on av- Estonia, providing drinking water and wastewater dispos- erage 137,000 m³ of wastewater per day, compared to Tallinna Vesi is the largest water utility company al services to nearly one third of Estonian population. We 124,000 m³ in 2015. in Estonia, serving over 22,000 customers and serve over 22,000 customers and 460,000 end con- 460,000 end customers. sumers in Tallinn and its surrounding areas. We have a We have an accredited water laboratory and an accredited responsibility to bring very high quality drinking water to wastewater laboratory which, in 2016, conducted together consumers, ensure service reliability and to collect and treat approximately 150,000 analysis (2015: 146,000), out of wastewater and storm water in an environmentally respon- which 100,000 were chemical and microbiological analy- 3 sible way. sis of drinking water (2015: 99,000) and 50,000 chemical 68,000 m analysis of wastewater (2015: 47,000). AS Tallinna Vesi was privatised in 2001 and based on the On average we produce 68,000 m3 of water per day. Services Agreement signed with the City of Tallinn at the The public water supply system comprises almost 1,150 time of the privatisation, the Company must fulfil 97 lev- km of water networks, 18 water-pumping stations and 64 els of services. Current Services Agreement is effective till ground borehole pumping stations with 93 boreholes. The 2020, still AS Tallinna Vesi has the exclusive right to provide catchment area in Harju and Järvamaa counties is around water and wastewater services in Tallinn until 2025. 1,800 km². The public sewerage system comprises 1,126 km 150,000 analysis of wastewater networks, 483 km of storm water networks We have two main treatment plants, Ülemiste Water Treat- and 174 sewerage and stormwater pumping stations across In 2016 we conducted 150,000 water analysis. ment Plant and Paljassaare Wastewater treatment plant. the service area. In 2010, AS Tallinna Vesi founded a subsid- In 2016, the Water Treatment Plant produced an average iary company, Watercom OÜ, aimed at providing services to 68,000 m³ of water per day (2015: 67,000). It has been the Company, but moreover, to diversify the product range relatively stable over the years. Almost 90% of drinking on offer and develop a non-regulated business. water is produced from surface water, with Lake Ülemiste 1,150 km as the main source for the residents of Tallinn, leading it to AS Tallinna Vesi Group consists of two companies. The be declared a non-public water body. Approximately 10% subsidiary, Watercom OÜ, is wholly owned by AS Tallinna The public water supply system comprises almost of consumers use regional ground water. Average water Vesi and consolidated to the results of the Group (hereinaf- 1,150 km of water networks. consumption has been relatively stable over the years, at ter referred to as Group). The Group structure has remained around 95 litres per day. unchanged since 2015. 6 TALLINNA VESI 2016 OPERATIONAL SITES OUR MAIN PRODUCTS AND SERVICES COMPANY’S AREA OF OPERATION • Head office, customer service, support services and • Water collection, treatment and supply • City of Tallinn OÜ Watercom at Ädala 10, Tallinn • Water and wastewater services • City of Maardu • Ülemiste Water Treatment Plant (WTP), Water and • Wastewater and storm water drainage and treatment • City of Saue Microbiological Laboratory at Järvevana Road 3, Tallinn • Laboratory services • Harku Parish (villages of Tiskre and Harkujärve, and • Paljassaare Wastewater Treatment Plant (WWTP), • Design works small town of Harku) Composting Fields and Wastewater Laboratory at • Pipeline construction works • The catchment area in Harju and Järva counties Paljassaare Cross 14, Tallinn • Owner supervision and project management • The catchment area of ca 1,800 km² in Harju and • Transportation services and road construction Järvamaa counties OPERATIONAL SITES SERVICE AREA OF AS TALLINNA VESI Paljassaare WWTP Head office Ülemiste WTP TALLINNA VESI 2016 7 Our performance in 2016 Operational highlights 2016 AVERAGE INTERRUPTION TIME WATER QUALITY LEAKAGE LEVEL IN WATER NETWORK PER PROPERTY IN HOURS Water quality was best over the years. Professional oper- Leakage level has been low for two consecutive years, Our aim is to provide high quality drinking water to all our ating of the treatment plant and professional and efficient which is a result of continuous monitoring of the state of clients and keep the water interruption time as short as pos- oversight of the processes, supported by continuous moni- our network and good maintenance plan. sible. Our target is, that water interruptions would not last toring allows us to guarantee consistent and improved wa- longer than 3.5 hours on average. ter quality 100% 18% 3.5 h 17% 3.4 h 99.8% 3.46 16% 3.44 3.42 99.93% 3.3 h 16.98% 99.86% 15% 99.6% 99.80% 16.14% 14% 15.86% 3.2 h 99.70% 15.07% 99.4% 13% 3.22 14.68% 99.56% 3.1 h 12% 3.15 99.2% 3 h 11% 99% 10% 2.9 h 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 8 TALLINNA VESI 2016 Financial highlights 2016 NUMBER OF SEWAGE BLOCKAGES SALES NET PROFIT Proactive jet washing has resulted a decrease in blockages. The sales have increased by 5.5% or EUR 3.05 million. The net profit decreased by 7.4% or EUR 1.47 million to 58.5% or EUR 1.79 million of the increase comes from con- EUR 18.39 million. In addition to discussed changes it was struction and asphalting services. 41.0% or EUR 1.25 million impacted by increased financial expenses mainly in relation comes from the increased consumption in the main water to the negative change of the fair value of swap contracts and wastewater services area. by EUR 1.15 million, balanced by the decrease in interest costs by EUR 0.68 million. 800 65 25 (number) (mln EUR) (mln EUR) 775 60 20 750 22.60 762 757 19.9 4 725 19.86 55 15 58.98 17.94 18.39 737 700 724 55.93 50 10 675 53.24 52.92 53.09 650 670 45 5 625 600 40 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 TALLINNA VESI 2016 9 GROSS AND OPERATING PROFIT TOTAL DIVIDEND PER SHARE PAY-OUT The gross profit increased by 3.1% or EUR 1.01 million to EUR Total dividends per share pay-out from 2015 net profit was The operating profit decreased by 3.7% or EUR 0.95 million 33.26 million.