By NEIL HARTNELL
Tribune Business Editor
THE Government spent $6.3 million of taxpayer monies last month to pay down the $8.2 million bill the Water & Sewerage Corporation had run-up with BISX-listed Consolidated Water, it was revealed last night, with the latter's Blue Hills plant driving a 41 per cent increase in its 2012 bulk water revenues.
Unveiling its results for the three months to end-March 2012, Consolidated Water revealed in its 10-Q filing with the US Securities & Exchange Commission (SEC) that the $6.2 million increase in the accounts receivables owed to it by the Water & Sewerage Corporation forced it to use $1.9 million in net cash to support its operating activities in the Bahamas.
"Operating activities used approximately $1.9 million in net cash for the three months ended March 31, 2012," Consolidated Water said.
"The use of cash by our operating activities during the three months ended March 31, 2012, arose from an increase of approximately $6.2 million in the accounts receivable of our Bahamas operations. The Bahamas government made payments totalling approximately $6.3 million in April 2012 to reduce these accounts receivable balances."
Tribune Business revealed back in March how Consolidated Water was owed $8.3 million by the Water & Sewerage Corporation at end-February 2012, almost $4 million of that balance having been run-up during the first two months of 2012.
The BISX-listed company said the debts owed to it increased from $4.4 million at year-end 2011 to $6.1 million at end-January 2012, and to $8.3 million at end-February 2012.
And, as a result, Glen Laville, the Water & Sewerage Corporation general manager, confirmed to Tribune Business that it would "definitely need" an increase to the $20 million taxpayer subsidy allocated to it in the 2011-2012 Budget last May to pay down the sum owed to Consolidated Water.
Meanwhile, Consolidated Water last night confirmed that the 67 per cent expansion to its Blue Hills reverse osmosis plant, the main Nassau plant that supplies the Water & Sewerage Corporation, had paid dividends during the 2012 first quarter.
The Bahamas is now Consolidated Water's "largest geographic market" in terms of revenues and water volume produced, with the Blue Hills expansion responsible for driving a 41 per cent increase in its 2012 first quarter bulk water revenues from $7.2 million last year to $10.1 million.
The "34 per cent increase in the number of gallons of water sold was primarily attributable to the expansion of the company's Blue Hills plant in the Bahamas during the fourth quarter of 2011", Consolidated Water said, along with pass-through charges related to higher energy costs.
Bulk water, which includes the water produced by the Blue Hills and Windsor plants in Nassau, now accounts for 60 per cent of Consolidated Water's total revenues, as opposed to 52 per cent in the 2011 first quarter.
Also confirming that the Blue Hills plant expansion was a key factor in increasing Consolidated Water's 2012 first quarter net income by 18 per cent year-over-year to $2.343 million, Rick McTaggart, its chief executive, said: "The performance of our bulk water segment reflects, to a large degree, the increase in water volumes resulting from a 67 per cent expansion in the production capacity of our Blue Hills plant in the Bahamas that came on line in the fourth quarter of 2011.
"As a result of this expansion, the Bahamas now represent the company's largest geographic market, when measured in terms of the volume of water produced and delivered to customers. Gross margins in the bulk segment improved to 24 per cent of bulk revenues, from 22 per cent a year earlier, primarily due to increased water production, a strict cost-control programme, and efficiency gains resulting from various operational improvement programmes that we have implemented over the past four years."
Consolidated Water confirmed in its 10-Q filing that the Blue Hills expansion to a 12 million gallon per day capacity was considered "substantially complete" in March 2012, triggering the timeline on its supply contract with the Water & Sewerage Corporation.
The filing added: "The water supply agreement between our Bahamas subsidiary and the Water and Sewerage Corporation of the Bahamas for water supplied from our Blue Hills plant was amended effective January 31, 2011.
"Under the terms of the amended agreement we increased the production capacity of the Blue Hills plant to 12 million US gallons per day. With this expansion, we are required to deliver - and the Water & Sewerage Corporation is required to purchase - a minimum of 63 million US gallons per week.
"The term of this water supply agreement has been extended to the later of (i) the date 20 years after the expansion was deemed substantially complete, or (ii) the date the plant has delivered approximately 65.7 billion US gallons of water. This expansion of our Blue Hills plant was deemed substantially complete in March 2012."
Consolidated Water also confirmed that it had redeemed the remaining $8.5 million outstanding on its $10 million Bahamian bond issue on March 31, 2o12.
Comments
Use the comment form below to begin a discussion about this content.
Sign in to comment
Or login with:
OpenID