THE BISX-listed Consolidated Water Company Ltd (CWCO) is reporting improved operating results and for the 2013 second quarter and first half of 2013, with total revenues for the quarter increasing two per cent to approximately $16.6 million.
CWCO is reporting that its “income attributable to its stockholders increased 46 per cent to $2,853,850, or $0.19 per diluted share, for the three months ended June 30, 2013, compared with net income attributable to stockholders of $1,957,492, or $0.13 per diluted share, for the quarter ended June 30, 2012. Net income during the second quarter of 2013 included $103,984 in earnings and profit sharing derived from the Company’s equity investment in its affiliate, OC-BVI, compared with $44,823 in earnings from this affiliate in the prior-year period.”
The company saw total revenues for the quarter ended June 30, 2013 increased 2 per cent to approximately $16.6 million, compared with approximately $16.2 million in the second quarter of 2012. “Retail water revenues increased 5 per cent to approximately $6.2 million (37 per cent of total revenues) in the most recent quarter, versus approximately $5.9 million (36 per cent of total revenues) for the three months ended June 30, 2012. The improvement in retail revenues was due to an increase of approximately 4 per cent in the total gallons of water sold,” said the company.
“Bulk water revenues were relatively unchanged at approximately $10.2 million (61 per cent of total revenues) in the second quarter of 2013, compared with approximately $10.2 million (63 per cent of total revenues) a year earlier. The slight decrease in overall bulk revenues resulted from the January 2013 expiration of the Company’s operating agreement with the Water Authority - Cayman for the Lower Valley plant on Grand Cayman Island. The Company generated approximately $510,000 in revenues from the operation of the Lower Valley plant during the second quarter of 2012. The remainder of the Company’s bulk operations in the Cayman Islands, The Bahamas and Belize generated higher revenues in 2013 that served to offset most of the lost Lower Valley plant revenues,” the company said.
The company’s gross profit rose 18 per cent to approximately $6.4 million (39 per cent of total revenues), versus approximately $5.4 million (33 per cent of total revenues) in last year’s second quarter. Gross profit on retail revenues increased to approximately $3.3 million in the most recent quarter (54 per cent of retail revenues), compared with approximately $3.0 million (51 per cent of retail revenues) in the quarter ended June 30, 2012.
The company said that the improvement in gross profit as a percentage of retail sales was due to the increase in revenues, as the cost of revenues did not vary significantly from 2012 to 2013. “Gross profit on bulk revenues increased 33% to approximately $3.1 million (31% of bulk revenues) in the second quarter of 2013, from approximately $2.3 million (23 per cent of bulk revenues) a year earlier. The improvement in gross profit dollars reflected improved margins for bulk operations and a reduction of approximately $518,000 in depreciation expense, as certain assets reached the end of their depreciable lives during the fourth quarter of 2012 and early in 2013. Gross profit as a percentage of sales improved due to these factors and the elimination of the relatively low gross margin earned on the operation of the Lower Valley plant in 2012. The services segment recorded a negative gross profit of ($27,127) for the three months ended June 30, 2013, compared with a gross profit of $77,631 in the second quarter of 2012, reflecting higher engineering expenses and greater employee costs,” said the company.
“We are pleased with the Company’s operating results for the second quarter and first half of 2013,” said Rick McTaggart, Chief Executive Officer of Consolidated Water Co. Ltd. “Operating income increased 43 per cent from the prior-year period in the most recent quarter, primarily due to improved operating leverage in the retail business segment, along with improved margins in our bulk water business segment resulting from a decrease in depreciation expense as certain pieces of equipment reached the end of their depreciable lives. Because all of this equipment continues to operate productively after many years of service, we consider this a testament to the very high maintenance standards employed by our Company.”
“In the retail business segment, our utility license on Grand Cayman Island has been extended until the end of September 2013, and we have commenced negotiations with the newly elected Cayman Islands Government. We have not proceeded with our Court case while we determine the new Government’s position regarding our previously-disclosed concerns.”
“We continue to move forward on our Rosarito desalination plant and pipeline project in northern Baja California, Mexico,” reported Mr. McTaggart. “In May, we made a down payment and took title to most of the land required for the project, and we made a second scheduled payment on the purchase option agreement for the other parcel of land needed for the project. During the second quarter, our pilot plant, which is situated on the proposed feed water source for the project, continued to provide excellent data that will be used to design the plant and was a focal point for various tours by government officials from both sides of the international border.”
“I am also pleased to report that our development activities in connection with the Rosarito initiative have presented us with the opportunity to pursue two other potential projects in Mexico, projects of a size consistent with some of our larger Caribbean-based operations.”
“In Bali, Indonesia, we commissioned 250,000 gallons per day of production capacity at our initial facility for a resort customer in Nusa Dua, a part of the island where a number of luxury resort properties are under development,” added Mr. McTaggart. “We believe the water demands of the tourist resorts in Nusa Dua will soon exceed the water supplies that can be provided to the area by the local public water utility, and that other areas of Bali will also experience fresh water shortages in the future. While our initial water production rates are modest, we believe Bali has the potential to evolve into a sizeable market once the local population and officials are exposed to the high quality of water that can be produced using Seawater Reverse Osmosis technology.”
Total revenues for the first half of 2013 increased slightly, to approximately $33.1 million, compared with approximately $33.0 million in the first half of 2012. Retail water revenues increased 1 per cent to approximately $12.6 million (38 per cent of total revenues) in the six months ended June 30, 2013, versus approximately $12.4 million (38% of total revenues) for the corresponding period of the previous year. Bulk water revenues declined 1 per vent slightly, to approximately $20.0 million (60 per cent of total revenues) in the first half of 2013, versus approximately $20.3 million (62 per cent of total revenues) in the comparable prior-year period. Services revenues increased to $530,706 for the six months ended June 30, 2013, compared with $242,238 in the prior-year period.
Consolidated’s gross profit rose 11 per cent to approximately $12.6 million (38 per cent of total revenues), versus approximately $11.4 million (34 per cent of total revenues) in the first half of last year. Gross profit on retail revenues increased 6% to approximately $6.9 million (55 per cent of retail revenues), compared with approximately $6.5 million (52% of retail revenues) in the first half of 2012. Gross profit on bulk revenues increased 22 per cent to approximately $5.8 million (29 per cent of bulk revenues) in the first half of 2013, from approximately $4.8 million (23 per cent of bulk revenues) a year earlier.
Comments
Reality_Check 10 years, 8 months ago
Consolidated Water should be paid for water production on the basis of water that ultimately flows out of the tap as this is the only water that can be metered and tied to the revenue of Water & Sewerage Corp. Paying Consolidated Water millions of dollars for millions of gallons of water that simply seeps into the ground and is lost forever is the height of pissing away money we don't have as a country. Our governments (both PLP and FNM alike) have tolerated this massive squandering of funds that manifests itself in the losses of Water & Sewerage Corp borne by Bahamian taxpayers for many years now. If Consolidated Water is unwilling or unable to help us fix our very leaky water distribution system, then we need to sign an appropriate contract with a water producer who is willing and able to do so.
The same should also apply to all of the proposals thus far put to Government by greedy investors looking to build an electrical generating plant to supply BEC with electricity. The investors behind each of the proposals received to date would love a "sweet profiteering" arrangement that leaves BEC and Bahamian taxpayers on the hook for the high cost of the country's electrical distribution system (covering many islands), BEC's unfunded pension liabilities, etc. etc. The eventual outcome of putting only the electrical generating plants in the hands of these investors, with a "sweet deal" contract on the back of an already financially troubled BEC, is all too obvious: BEC would soon go belly-up leaving Bahamian taxpayers saddled with funding its unsettled liabilities, and the less costly parts of its electrical distribution system would be picked up at a fire sale price by the private plant owners.
The arrangement between Water & Sewerage Corp and Consolidated Water is a classic example of why these types of deals fail.
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