Now Pikitup picks up a R613-million surplus
05 November 2015
Pikitup, the City of Johannesburg's waste management entity, has realised a surplus for the first time since its inception 12 years ago.
The company's improved financial position - which saw it achieving an overall surplus of R613-million, with an accumulated surplus of R181-million - was announced by Member of the Mayoral Committee for Environment and Infrastructure Services Councillor Matshidiso Mfikoe on Thursday November 5.
The municipal-owned entity's healthy financial position followed the implementation of a robust five-year financial recovery plan spearheaded by Managing Director Amanda Nair and Financial Director Suren Maharaj.
The plan, set in motion in February 2013, focused on the maximisation of revenues from domestic and commercial businesses and realising cost savings through the optimisation of the company’s fleet, reduction of overtime, improvement of revenue collection and providing for the impairment of debt, coupled with the implementation of a financial management best practice.
The plan reaped the desired results in the 2014-2015 financial year, halfway through its implementation.
For 12 years since its inception, Pikitup has been consistently incurring trading losses on a year-on-year basis owing to financial and operational mismanagement.
This resulted in the company becoming insolvent, which worsened as years went by. The insolvency peaked at an accumulated deficit of R432-million in February 2013, posing immense expectations and pressure on the new leadership of Nair and Maharaj.
MMC Mfikoe commended Pikitup for honouring the Mayoral Priorities by performing "exceptionally well" during the 2014-2015 financial year.
“This is truly a remarkable achievement and one of the most successful financial turnaround strategies in recent times in the public sector in South Africa,” MMC Mfikoe said.
A generation ago, managing waste was a straightforward business. Pikitup has since reinvented its business model by prioritising waste avoidance and minimisation.
The entity is implementing safe waste transportation, cleaner waste treatment and disposal as a last resort when managing all forms of waste.
The entity continues to address the imperatives of the Growth and Development Strategy 2040 (GDS 2040), which respond to the global, national and regional challenges of climate change, resource constraints, the triple challenge of poverty, unemployment and inequality, as well as improving the overall governance and compliance environment within the company.
“We are also still aware of the areas where improvement is required and the board is working with the executive management team to ensure that these areas are addressed. One such area is general communication and stakeholder involvement. This has been identified as a key intervention area going forward and will receive particular attention,” MMC Mfikoe said.