Message from the Chairman and Ceo of Eyath Sa
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CONTENTS Letter from CEO .................................................... 4 Information on how the annual report was prepared ........................ 6 01-THE COMPANY IN 2018 1.1 At a glance ...................................................... 8 02 02-THE COMPANY 2.1 Background ...................................................12 2.2 Objects ............................................................14 2.3 Vision and Prospects ...................................15 2.4 Major investment projects under way ....17 2.5 Major events in 2018 ..................................18 2.6 Pricing policy .................................................21 2.7 Research, Development & GIS ..................22 03 04 03-COMPANY STRUCTURE 04-CORPORATE SOCIAL 3.1 Organisational Chart ...................................26 RESPONSIBILITY 3.2 The Board of Directors ...............................28 3.3 The General Manager and Managers ......30 4.1 Employee education - support ..................36 3.4 Corporate Governance Statement ...........32 4.2 Customer service .........................................37 3.5 Legislative Framework ...............................33 4.3 Ecological practices .....................................38 4.4 Relations with the local community ........39 4.5 Human Resources ........................................40 05 05-INFRASTRUCTURE 5.1 Water supply .................................................44 5.2 Quality control ..............................................49 5.3 Sewerage .......................................................50 5.4 Waste water treatment...............................52 5.5 Caring for the environment .......................55 5.6 Permits ...........................................................56 5.7 Technical Works ............................................57 5.8 Health and Safety.........................................59 06 06-CONSUMPTION 6.1 Customer service .........................................62 07 6.2 Consumption data analysis ........................63 07-INVESTMENT PLAN 7.1 Operating activities .....................................75 7.2 Investing activities .......................................76 7.3 EYATH's 2018-2024 Investment Plan .....79 7.4 EYATH's Fixed Assets' 2018 - 2024 Investment Plan ............................................82 7.5 IT System & Infrastructure ........................83 Development Unit 08 08-SHARES 09 8.1 Performance .................................................86 09-ANNUAL FINANCIAL 8.2 Share Capital Structure ..............................87 STATEMENTS FOR 2018 8.3 Dividend Policy..............................................88 8.4 Shareholder’s Rights ...................................88 Annual Financial Report ................................. 100 8.5 Share's stock Market performance ..................................92 8.6 Shareholder line-up .....................................93 8.7 Share technical data....................................95 8.8 Shareholder relations .................................97 4 MESSAGE FROM THE CHAIRMAN AND CEO OF EYATH S.A. Dear Shareholders, Among other things, our investment plan includes proj- As the financial results show, 2018 was yet another year ects of exceptional importance for the city: with high profits and high liquidity for EYATH S.A., as well - The extension of the Thessaloniki Water Treatment as a year when major investments were made in human Plant (Phase A2, water refinery) with € 21.5 million fi- resources. nancing from the NSRF. From the moment the current 2018 also functioned to shed light on certain issues: It management team assumed its duties, it has system- highlighted the chronic problems of disinvestments giv- atically pointed out that this project is of fundamental en older attempts to privatise the company but also vin- importance for EYATH expanding into new areas and for dicated the priorities the current management team set coping with emergencies, like the one in March 2018. when it took up its duties. The tender documents for the project are currently be- Within the first half of 2018 the company had to face ing approved by the Central Macedonia Region’s Manag- three successive crises: ing Authority, so that the tender to build the project can In January hydrocarbons were found at the Thessaloni- be launched. ki Water Treatment Plant before the water entered the - Sewerage works to complete the connection with Thes- treatment process, and it was discovered these derived saloniki’s low-lying areas (namely works in the Dendro- from Polyfytos reservoir on the Aliakmon River. potamos and K16 interchange area) with a budget of € In March the central pipeline that supplies Thessaloniki 7.5 million, which will see the end of a chronic problem with water from the Aravissos spring burst causing ma- - the threat to public health in Western Thessaloniki and jor problems with water supply for the entire urban area. for the protection of the Thermaikos Bay. Currently, we In May water in the tank at the Dendropotamos pumping are waiting for the contract to be signed. station was more turbid than usual, once again creating - extension of the SCADA system for the water supply problems with water supply to the centre of Thessalon- network, with a budget of € 4.1 million, as well as an iki. extension of network zoning, projects which will signifi- These were company operating crises that involved pub- cantly contribute to meeting emergency water supply lic health issues. The company reacted in coordinated needs and to better managing available water. fashion to these difficult technical and operational prob- So despite the serious, costly technical problems the lems which arose, doing what it could. Its approach to company had to deal with this year (either due to dis- the Aravissos pipeline was confirmed by the technical investment in past years or due to extraneous factors), report prepared by experts from the Technical Cham- the company presented residents of Thessaloniki with a ber of Greece - Central Macedonia Annexe: The method new pricing policy which for the first time introduces re- employed by EYATH’s technical staff to repair it was the ductions for almost all household consumers, paying the right one, the duration of works was reasonable and the local community, households and businesses a “social water distributed to the city matched the capabilities of dividend”. the existing water supply system. The management team proposed the new 2019-2023 However, that expert opinion does not negate the major pricing policy to the Special Secretariat for Water and hassle suffered by residents of the Thessaloniki urban the jointly competent ministries and obtained their ap- area. proval. For households, which constitute the majority of For that reason Management implemented a 3-prong EYATH's consumer base (68%), the logic of the pricing plan relating to the Aravissos pipeline and repairs to it: policy is to reduce the price of water on lower consump- It concluded a framework agreement to reinforce and tion levels to ensure it serves a social purpose and in- repair the aqueduct (budgeted cost of € 5.4 million) and crease it at higher consumption levels, to discourage also devised a way to detect leaks using radar satellite wastage. The price is also reduced for business tariffs and internal inspection of pipes for leaks using acoustics. for lower levels of consumption and increased for higher The three interventions will take place with the pipeline levels of consumption as an incentive to avoid wasting in full operation so that consumers are not negatively this precious natural resource (64% of businesses will impacted. benefit from this) and for 83% of industries the charges At the same time, a 5-year, € 170,000,000 investment remain fixed (for consumption levels of up to 2,000 m3). plan is continuing, which includes studies and projects to At the same time, public access to this commodity by maintain, replace, complete and extend the infrastruc- vulnerable population groups is also ensured and ex- ture for the city's water supply and sewerage system. tended (as mandated by the new Joint Ministerial De- If many of these projects had been designed and im- cision in any event) by adopting the IDIKA criteria for plemented years ago as they ought to have been, they inclusion in social tariffs. would have been amortised by now or the incidents Improvements to the urban area’s water supply and sew- mentioned would entail a smaller overall cost. erage system thanks to the EYATH investment plan and 5 the “social dividend” for citizens via our new pricing pol- icy, cannot be implemented in the absence of personnel. This year the company completed the recruitment pro- cess for 150 new employees via the Supreme Staff Se- lection Committee, 14 years after the last staff mem- bers were recruited, bringing staff levels to 360. This investment in HR was utterly essential to fill vacant posts, but it also had a major financial impact on prof- its. It is just a matter of time before new staff members start making a decisive contribution to an increase in the company's value and to the rationalisation of cost. They will also help implement our investment plan, which will prevent cases of drought like the ones we experienced last March. Safeguarding access for all to water supply / sewerage services, proper and sustainable management of water resources for future generations, which are strategic ob- jectives of EYATH as explained above, are top priorities on the international agenda too and not