Manila Water income dips 18% to P2.9 B in 6 months

MANILA, Philippines — Ayala-led Manila Water Co. Inc. saw its net income dip 18 percent to P2.9 billion amid higher costs and expenses coupled with government penalties.

In a regulatory filing, the water company said the lower bottomline was mainly due to the impact of the water supply shortage despite revenues improving seven percent to P10.5 billion amid increased billed volume and higher average effective tariff in several key business units.

“The growth, however, was still weighed down by the impact of the one-time bill waiver program implemented in the Manila concession during the first quarter of 2019 to assist affected customers,” Manila Water said.

Operating expenses surged 22 percent to P4.5 billion, a major factor of which was the payment of the penalty imposed by the Metropolitan Waterworks and Sewerage System (MWSS).

The MWSS board in April decided to fine the east zone concessionaire P534.05 million and an additional P600 million to be used for the development of a new water supply source.

Manila Water violated the provision of the concession agreement which requires 24/7 water supply to its consumers.

Total billed volume likewise increased by eight percent to 624.8 million cubic meters despite lower water supply and service availability during the period.

Outside the Manila concession, Laguna Water grew its earnings by 20 percent to P200 million, driven mainly by additional billed connections and higher average tariff with the implementation of its new sanitation charge.

Estate Water’s positive performance was bolstered by higher supervision fees, as well as an increase in billed volume through the takeover of new residential and mixed-use estates.

Other domestic subsidiaries, however, including Clark Water and Boracay Water registered lower earnings due to the permanent closure of several commercial accounts in line with clearing operations last year, as well as market share considerations due to increased competition.

Manila Water Asia Pacific, which holds Manila Water’s international investments in the region, saw an 11 percent increase in earnings to P376 million, mainly driven by the equity share of East Water in Thailand.

This, despite challenges encountered by subsidiary operations in Vietnam which posted lower income contribution for the period due to higher costs, lower billed volume and delays in regulatory tariff increases