Manila Water pumps 13% higher income in 1st qtr

Manila Water Corp. (MWC) posted a net income of P309 million in the first quarter this year, up by 13 percent from the previous year’s level, the company said yesterday.

Revenues grew 16 percent during the period to P930 million from P802 million in the same period last year.

The Ayala-controlled company said its aggressive capital expenditure program has resulted in significant service expansion, adding one million people to its service area.

During the quarter, MWC poured a total of P612 million in capital expenditures into its system rebuilding efforts. The amount is expected to increase to around P3 billion by yearend, bringing the company’s total capital investments for pipe replacements and the rehabilitation of water and sewerage infrastructure to P9 billion since it first started in 1997.

The company plans to spend an average of P2.3 billion per year or a total of P19 billion over the next five years.

A preliminary evaluation of MWC’s 2003 annual Key Performance Indicators/Business Efficiency Measures showed that the utility firm satisfactorily met its 2003 targets.

The KPI/BEM is a performance-based monitoring system made up of 21 indicators developed by the Metropolitan Waterworks and Sewerage System (MWSS) and its consultants to keep track of the company’s performance. The indicators focus on service delivery, collection efficiency and cost effectiveness.

MWC’s projects have significantly benefited the East concession area based on the KPIs/BEMs set and monitored by government regulators.

MWC was formed in 1997 as a joint venture between Ayala Corp. and the UK-based United Utilities Plc.

The company recently obtained the go-signal of the Securities and Exchange Commission to raise its authorized capital stock from P2 billion to P4 billion. The increase is preparatory to a planned initial public offering (IPO) in 2005 and as part of a major capital restructuring.

Of the P2 billion capital increase, P500 million has been subscribed and paid by MWC majority shareholders: Ayala Corp. (P310.34 million), United Utilities Pacific Holdings BV (P120.69 million), and BPI Capital Corp. (P68.96 million).

The fresh infusion of P500 million in preferred equity from MWC’s shareholders reinforces the group’s continued confidence in the sustained growth and financial strength of the water utility.

The IPO is expected to generate P3 to P5 billion in proceeds which would help finance MWC’s P16-billion expansion program. The IPO is part of MWC’s 25-year concession agreement with the MWSS.