Manila Water income rises 14% to P2.3 billion in first 9 months

MANILA, Philippines - Ayala-led Manila Water reported yesterday its net income in the first nine months of this year increased 14 percent to P2.3 billion, driven by a six-percent increase in core revenues and better tax and operating efficiency.

For the third quarter alone, the water concessionaire in Manila’s east zone posted an 11 percent higher net income to P809.5 million due to a nine-percent increase in tariff and a one percent increase in volume.

Total revenues in the nine-month period rose six percent to P7.035 billion, while total cost and expenses grew three percent to P1.964 billion.

“The reason behind the stability of the business can be attributed to our ability to adjust to the changing business environment. The completion of some of our expansion projects helped us meet the growing demand, as we increased our customer base. Likewise, the strong focus on cost management further improved our operating margins,” said Manila Water president Rene Almendras.

During the first nine months, Manila Water added 54,000 new households to its service coverage, bringing its total customer base to 1.07 million households.

The company’s sustained operational efficiency also contributed favorably to its financial performance for the period.

Manila Water’s non-revenue water level, representing water lost to pilferage and leakage, dropped to a record low of 15.4 percent, 4.8 percentage points lower than last year’s level.

In a briefing for newsmen, Manila Water chief financial officer Luis Juan Oreta also revealed that the water firm plans to raise $200 million or P10 billion next year to fund part of its expenditures for 2011.

Most likely, Oreta said Manila Water would tap the capital markets, both domestic and international, through a bond offering.

He assured that the firm will maintain a 50-50 balance in sourcing its borrowings from both domestic and international sources.

Oreta expressed confidence that the financing market environment is currently “favorable” with all the global concern about climate change and protecting the environment.

Manila Water will be investing a total of P450 billion over the remaining 29-year period of its concession agreement with the Manila Waterworks and Sewerage System (MWSS).

Oreta also revealed that Manila Water is in serious talks with a potential Indian partner to form a joint venture to look for possible water projects in India.

Manila Water has also made initial progress in its efforts to expand outside the east zone of Metro Manila.

The company has formally assumed operations of its recently acquired concession in Laguna covering the city of Sta. Rosa and the municipalities of Biñan and Cabuyao. Additional resources have also been deployed in Boracay as part of the ongoing turnover of the water concession there.

Aside from the Laguna and Boracay projects, Manila Water has also submitted a proposal to provide Cebu province 35 million liters of treated bulk water per day. The said proposal is currently being evaluated by the provincial government of Cebu.