Manila Water income flat in January-September on rising cost

MANILA Water Co. Inc., the concessionaire for the East Zone of Metro Manila, said its net income was flat during the three quarters of the year ending September as cost rise.

The company said its net income was at P4.9 billion for the period on steady performance of its Manila Concession and supported by Manila Water Asia Pacific.

It posted billed volume growth of 4 percent.

That growth, however, was offset by the flatter billed volume in the local subsidiaries under Manila Water Philippine Ventures.

“Cost pressures have increased with the current economic environment as well as necessary operational and growth initiatives, with cost of services and operating expenses growing by 21 percent to P5.94 billion,” it said.

Billed volume growth was also flat at 3 percent, with billed connections totaling over 980,000.  Systems losses improved to 12.3 percent from the same period last year.

Capital expenditures was at P6 billion for the first nine months of the year.

Manila Water said it secured approval from Metropolitan Water and Sewerage System (MWSS) for a tariff adjustment hike between P5.94 to P6.18 per cubic meter, or nearly 25 percent of the current basic tariff for the fourth rate rebasing period.

The first tranche of the adjustment was implemented on October 16, by way of a P1.46 increase per cubic meter.  Subsequent adjustments are programmed for 2020 and 2021; each amounting to P2.

MWSS incorporated a possible additional incremental adjustment in 2022, from P0.76 to a P1.04 increase. This is contingent on the development and execution of key water source projects.

On the other hand, Manila Water Philippine Ventures (MWPV) posted 5-percent revenue growth to P2.38 billion, supported by a steady topline in its existing subsidiaries. However, cost levels have increased due to the takeover of new facilities and estates by its business-to-business arm, Estate Water, as well as the continued deployment of resources to support market expansion.

Recent new business wins provide potential earnings growth on the horizon, it said.

MWPV recently received a Notice of Award from Tanauan Water District for the provision of water supply and sanitation services in Tanauan, Batangas.

The project totals P1.51 billion over the 25-year contract period.

MWPV was recently granted a franchise to provide water supply and sanitation services in San Fabian, Pangasinan.  This will be for a term of 25 years with an assumed billed volume of over 12.6 million liters per day. Total capex of the project is estimated at P742 million and is expected to be operational by 2019.

“With the rate rebasing exercise with MWSS finally reaching resolution, we can now focus on implementing our business plan for the coming years given increasing demand and highly encouraging developments in the Manila Concession. This renewed stability enables us to intensify our drive toward our growth aspirations beyond the East Zone, both domestically and in the region,” company president and CEO Ferdinand M. de la Cruz said.