Manila Water posts 13% income hike to P1.99 B in Jan-Sept

Manila Water Corp. reported a 13-percent rise in net profit for the first nine months of the year to P1.99 billion, mainly due to higher billed volume and the recovery of its system loss.

Manila Water chief finance officer Sherisa Nuesa said the firm’s operating revenues grew 23 percent to P6.63 billion while earnings before interests, taxes, depreciation and amortization (EBITDA) improved 32.76 percent to P4.62 billion.

The company’s strong performance was attributed to its aggressive capital investment program which resulted in a five-percent drop in non-revenue water (NRW) or system loss. “This was achieved despite the challenging business environment and the full implementation of the new accounting rules (IFRIC 12) this year,” she said. 

Aggregate billed volume increased five percent from 277.8 million cubic meters to 291.5 million cubic meters with the addition of 33,000 new service connections. The level of NRW on the other hand, was maintained at 20 percent.

Nuesa said the Ayala-controlled utility firm would have reported higher net earnings had it not booked an additional P170 million in interest costs on service concession obligations.

In the third quarter alone, Manila Water posted a net profit of P730 million, up 14 percent from the previous level’s P641 million.  

Nuesa said operating costs went up by only six percent to P2 billion compared with P1.9 billion a year earlier, well below the September inflation rate which registered at 11.9 percent, due to various cost-saving initiatives implemented by the company.

As of end-September this year, Manila Water had total assets of P29.5 billion, up five percent from the year-ago figure of P27.98 billion. Of the total, P4.5 billion represents intangible assets from future concession payments.

Anticipating the possibility of the financial crisis worsening in the coming months, Manila Water has put in place necessary measures to cope with the potential adverse effects of the global crisis on the company.

“Most of the financial risks that could potentially affect the company during an economic downturn have already been largely addressed by the firm. In addition, aside from a well-calibrated financing plan that included the recent P4-billion bond issue, Manila Water had also initiated various corporate programs to minimize operating costs,” the utility firm said.

While the company said the crisis will likely create various opportunities which it can take advantage of, it will be more judicious in the selection of these new projects.

However, with its strong liquidity position and access to multilateral funding, the company remains strongly committed to its water and wastewater investment plans for Metro Manila’s East Zone.

Manila Water has earmarked P37 billion for capital expenditures over a five-year period beginning this year. It plans to build additional wastewater treatment facilities and upgrade existing ones in order to increase sewerage coverage in the East Zone from the current 16-percent level to 30 percent.