MANILA Water Co., Inc. reported its net income fell 11% to P4.4 billion as of end-September, saying its performance is still dampened by the impact of the water supply shortage that hit its concession area in Metro Manila’s east zone early this year.
“Despite these challenges, continued efforts towards operating efficiency in the East Zone and the increased contribution of the domestic subsidiaries have made the business more resilient. As a result, core net income stood at P5.8 billion for the period, an improvement of over 10% from last year,” the Ayala-led listed company said.
Manila Water did not release figures for the third quarter.
The higher contribution of domestic businesses outside the east zone drove consolidated revenues to rise by 10% to P16.1 billion during the January to September period. The growth came despite the impact of the one-time bill waiver program during the water supply shortage early this year.
The rise in revenues, however, was outpaced by the rise in consolidated costs and expenses at 18% to P7 billion, which was driven by the penalty imposed by the Metropolitan Waterworks and Sewerage System (MWSS). Adding to expenses are the additional service recovery and operations augmentation costs in relation to the water supply shortage.
Without these one-off items, the increase in consolidated costs and expenses would be 6% to P5.8 billion, the company said.
Billed volume in the Manila concession dropped by 2% while the average consumption decreased by 4% as a direct result of the lack of available raw water supply for distribution.
The decline, along with the one-time bill waiver program, dampened top-line growth but core growth stayed resilient, Manila Water said. Nine-month revenues in Metro Manila’s east zone rose by 3% to P12.5 billion.
“For costs [and] expenses, the main contributors were direct costs, comprised of additional repairs and maintenance costs due to increased valving activities, increased overhead costs, as well as higher water treatment chemicals with the new water treatment facilities,” the listed company said.
Excluding one-time items brought about by the water supply shortage, direct costs were nearly flat at 1% to P1.5 billion, in line with the rise in billed volume.
Net income for the Manila concession fell by 17% to P4 billion, but without the one-time expense resulting from the water supply shortage, core profit improved by 2% to P5.3 billion.
Domestic operations under Manila Water Philippine Ventures, Inc. recorded a net income of P301 million, up 126% from a year ago, led by its division Estate Water, and subsidiaries Boracay Island Water Co. and LagunaAAA Water Corp.
International operations under Manila Water Asia Pacific Pte. Ltd. recorded an 8% increase in equity share in net income of associates to P552 million, largely due to the contribution of the Thailand business Eastern Water Resources Development and Management Public Co. Ltd., or East Water.
“Subsidiary operations in Vietnam posted lower income contribution for the period due to higher regulatory and operating costs, even as billed volume remained relatively stable,” the company said.
On Monday, shares in Manila Water went down by 0.94% to P19 each. — Victor V. Saulon