MANILA WATER Co., Inc reported a 27% fall in first-quarter net income to P1.23 billion, in part as the water concessionaire factored in the impact of the water supply shortage within its service area starting in March.
“In all, Manila Water net income margin for the period stood at 24%,” the Ayala-led company said, adding that excluding the effects of the water supply shortage, core net income grew 22% to P2.1 billion.
Revenues rose by 8% to P5.1 billion, driven by the higher tariff during the quarter in its Metro Manila east zone concession along with the improved growth of its business outside the Philippine capital, Manila Water told the stock exchange on Thursday.
“However, this growth was partially offset by the voluntary, one-time Bill Waiver Program to help alleviate the inconvenience of all customers and to those severely affected by the water shortage in the Manila concession,” the company said.
Operating expenses jumped by 39% to reach P2.5 billion, driven by higher costs and expenses. This was due to the provision for the financial penalty imposed by the Metropolitan Waterworks and Sewerage System (MWSS) amounting to P534 million, which the company has decided to pay.
Manila Water said it continues to make progress on its service recovery efforts.
As of May 8, the company has achieved 98% water availability of at least 8 hours at 7 pounds per square inch (psi), or at ground floor level. It has also reached 72% 24-hour water availability at 7 psi.
The company’s continuing work on various distribution solutions seeks to address pocket areas of less than 8 hours of supply.
Its Cardona water treatment plant has been producing 50 million liters per day (MLD) and deep wells have augmented the Angat Dam water supply with production of 30 MLD. Cross-border flows are at 16 MLD, the company said.
Outside the Manila concession, its subsidiary Manila Water Philippine Ventures, Inc. (MWPV) reported a 7% rise in first-quarter profit to P174 million. Growth in this segment was led by MWPV’s business-to-business arm, Estate Water, which recorded gains in its customer base through the takeover of new estates and key accounts.
Estate Water’s net income stood at P93 million, 166% more than the previous year. But other domestic subsidiaries in Clark, Laguna, and Boracay registered lower earnings for the period due to a slowdown in demand and higher operating costs.
Manila Water Asia Pacific Pte. Ltd. (MWAP), which houses the company’s investments in the region, more than doubled its earnings to P135 million with the full recognition of the acquisition of Eastern Water Resources Development and Management Public Co. Ltd., or East Water, in Thailand, coupled with additional income from MWAP’s industrial park water supply operations at PT Sarana Tirta Ungaran in Indonesia.
The operating subsidiaries in Vietnam, namely Thu Duc Water and Kenh Dong Water, posted lower income contribution due to lower demand.
On Thursday, shares in Manila Water dropped by 2.27% to close at P21.55 each. — Victor V. Saulon