Water firm boosts Q1 net income

Manila Water announced yesterday that its net income for the first quarter of 2006 increased by 24 percent year-on-year, reaching P600 million as a result of the continued growth in water sales, or billed volume, and improved operational efficiencies.

The company achieved a major milestone as it increased billed volume level to 887 million liters per day (MLD) as of end of March. Contributing to the achievement is the additional 40,000 households connected to the water network since last year.

The increase in billed volume resulted in quarterly revenues amounting to P1.47 billion, a 15 percent increase from the same period in 2005.

Through effective cost-management initiatives, operating expenses were kept in check.

The company explained that it was successful in managing power consumption as well as in cutting other major expense items across the organization.

As a result, earnings before income taxes, depreciation and amortization (EBITDA) rose to P847 million, up 23 percent year-on-year.

The company’s expansion of its water network to the areas of Taguig and Rizal is now in full swing with a total of 65 kilometers of new pipelines laid in the first quarter of 2006.

Major capital investment projects have broken ground during the last three months. Among these is the construction of water network in Baras to accelerate water service coverage in this town.

Other projects that were started earlier are now realizing gains as reflected in the continuous widening of Manila Water’s customer base and increasing billed volume.

The reduction of system losses remains a challenge for the company. Through a massive pipe replacement program, Manila Water was able to bring down system losses to 34 percent as of end of March 2006, its lowest level ever since it started operations and a seven percent point decrease from the same period last year.

"Our continuing net income growth is attributed to the expansion of our network and operating efficiency gains brought about by our continuing capital expenditure program. We believe that we can sustain the positive momentum we have built during the first three months of 2006 as we continue our aggressive P4.5 billion capital investment program for 2006," Manila Water president Antonino Aquino said.