The Tribune

BY NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

THE MAIN water provider for the Water & Sewerage Corporation’s New Providence customers yesterday revealed that the debt owed by the latter was slashed by more than $5m or 21.4 percent during the three months to end-June 2026.

Consolidated Water, whose shares are listed on the Bahamas International Securities Exchange (BISX) as Bahamian Depository Receipts (BDRs), revealed in just-disclosed filings with the US Securities & Exchange Commission (SEC) that the outstanding sums due from the Water & Sewerage Corporation for supplies sourced from its two New Providence reverse osmosis plants had been cut from the $23.9m at end-March 2026.

The remaining $18.8m is also lower than the $20.7m owed by the state-owned water utility to Consolidated Water at year-end 2025, signalling that Bahamian taxpayers have been called upon to inject further subsidies to help pay down the Water & Sewerage Corporation’s debt.

However, almost two-thirds, or 64 percent, of the remaining $18.8m - around $12.5m - was yesterday described by Consolidated Water as “delinquent”, likely meaning that it has 90 days or more past due.

The BISX-listed water supplier, in its 10-Q filing with the US SEC, said: “Consolidated Water Bahamas’ accounts receivable balances, which include accrued interest, due from the Water & Sewerage Corporation amounted to $18.8m and $20.7m as of June 30, 2026, and December 31, 2025, respectively.

“Approximately 64 percent and 71 percent of the accounts receivable balances were delinquent as of those dates, respectively. The delay in collecting these accounts receivable has adversely impacted the liquidity of this subsidiary.

“From time to time, including presently, Consolidated Water Bahamas has experienced delays in collecting its accounts receivable from the Water & Sewerage Corporation. When these delays occur, we hold discussions and meetings with representatives of the Water & Sewerage Corporation and the Government of The Bahamas,” Consolidated Water added.

“All previous delinquent accounts receivable from the Water & Sewerage Corporation, including accrued interest thereon, were eventually paid in full. Based upon this payment history, we have not provided for a material allowance for credit losses for Consolidated Water Bahamas’ accounts receivable from the Water & Sewerage Corporation as of June 30, 2026, or prior periods.

“We continue to be in frequent contact with officials of The Bahamas government, who continue to express their intention to significantly reduce Consolidated Water Bahamas’ delinquent accounts receivable balances. However, we are unable to determine when or if such reduction will occur.”

As to the consequences for the cash flow and liquidity of its Bahamian subsidiary, Consolidated Water added: “If Consolidated Water Bahamas is unable to collect a sufficient portion of its delinquent accounts receivable, one or more of the following events may occur.

“Consolidated Water Bahamas may not have sufficient liquidity to meet its obligations; we may be required to cease the recognition of revenue on Consolidated Water Bahamas’ water supply agreements with the Water & Sewerage Corporation; and we may be required to significantly increase our allowance for credit losses for Consolidated Water Bahamas’ accounts receivable. Any of these events could have a material adverse impact on our consolidated financial condition, results of operations and cash flows.

Consolidated Water, meanwhile, has begun to supply the Water & Sewerage Corporation’s Cat Island customers with water from two new reverse osmosis plants now commissioned and online. “The Cat Island contract expires in 2041 and requires the two plants located in Bennett’s Harbour and New Bight to deliver 504,000 gallons of water each week per plant,” the BISX-listed provider said.

As for its Nassau operations, it added: “The contracts to supply water to the Water & Sewerage Corporation from its Blue Hills and Windsor and plants require to guarantee delivery of a minimum quantity of water per week.

“If the Water & Sewerage Corporation requires the water and Consolidated Water Bahamas does not meet this minimum, Consolidated Water Bahamas is required to pay the WSC for the difference between the minimum and actual gallons delivered at a per gallon rate equal to the price per gallon that the Water & Sewerage Corporation is currently paying Consolidated Water Bahamas under the contracts.

“The Blue Hills contract expires in 2032 and requires Consolidated Water Bahamas to deliver 63m gallons of water each week. The Windsor contract expires in 2033 and requires Consolidated Water Bahamas to deliver 16.8m gallons of water each week.”

Rick McTaggart, Consolidated Water’s chief executive, said of the results for the three months to end-June: “Bulk revenue increased 20 percent and gross profit increased 27 percent, primarily due to higher energy pass-through charges by Consolidated Water Bahamas driven by significantly higher energy costs.

“Revenue and gross profit also benefited from two new Cat Island desalination plants supplying potable water to the Water and Sewerage Corporation of The Bahamas.” For the 2026 first half, Consolidated Water said bulk segment gross profit improved due to a $226,000 decrease in insurance expense for Consolidated Water Bahamas.