Manila Water income drops 5% in January - September

MANILA, Philippines — Manila Water Co. Inc.’s net income dropped by five percent in the first nine months as higher costs pushed down earnings.

In a disclosure to the stock exchange, the East Zone concessionaire said earnings fell to P11.995 billion from P12.67 billion in the same period last year.

The drop in earnings was due to by an increase in net interest expense which totaled P4.67 billion, more than double last year’s P2.3 billion.

Likewise, the company’s amortization and depreciation went up by 26 percent to P4.92 billion from P3.91 billion a year ago.

Revenues, on the other hand, rose by 30 percent to P33.4 billion in the January to September period from P30.05 billion last year.

The Razon-led company attributed the increase to the rise in higher average tariffs and billed volumes from its business operations.

Manila Water said about 73 percent of its operating revenues were derived from water sales, while the remaining 22 percent came from environmental and sewer charges.

Total billed volumes in the nine-month period reached 663.11 million cubic meters, while billed connections totaled 1,425,174.

For its East Zone concession area, which has integrated WawaJV Co, revenues grew by 12 percent to P26.9 billion, driven by the P67.2 per cubic meter rate rebasing adjustment in January.

The company’s revenues from its non-East Zone businesses rose by six percent to P7.4 billion on tariff adjustments, higher billed volume in Clark, South Luzon and Boracay, as well as higher supervision fees from the Laguna Water and Estate Water projects.

“These investments are strengthening our business for the future expanding and diversifying our water sources, reinforcing system reliability and improving network efficiency,” Manila Water president and CEO Roberto Locsin said.

“We are equally encouraged by the growth we continue to see in our non-East Zone businesses. The strong performance of our subsidiaries is a clear indication of even more opportunities to provide better, and reliable water service to more communities in the country,” he added.

The company’s capital spending during the period amounted to P11.7 billion, as the company prepares for the effects of El Niño on water supply.

“As we prepare for a potentially strong El Niño, we remain confident in our ability to manage near-term challenges with discipline while sustaining dependable, long-term value creation for our customers and shareholders,” Locsin added.

Meanwhile, the company’s board of directors has approved a P10 billion loan with the Land Bank of the Philippines to partially finance its capital expenditures.

Manila Water said the loan facility will have a term of up to 10 years and will finance the company’s East Zone capex and general corporate requirements.