Manila Water reports drop in net income

Manila Water Co. Inc. saw its net income in the first semester ebb by 18 percent to P2.9 billion as costs jumped by more than a fifth.

Manila Water said in statement the decline in profit was driven by the impact of the water supply shortage that hit its Manila concession business.

Even then, despite a prevailing supply shortage that started in March, the volume of billed water in Metro Manila and Rizal shrank by a mere 2 percent year-on-year.

“Outside the East Zone, domestic business operations saw higher earnings contribution while foreign operations held steady,” it said. “On the other hand, new business developments continue to provide market expansion and new sector opportunities.”

Consolidated revenue rose 7 percent to P10.5 billion, thanks to a bigger billed volume and higher average effective tariff in several key business units.

Manila Water said the rise in revenue was weighed down by the impact of its voluntary one-time bill waiver program that was implemented in April at a cost of P353 million.

Also, consolidated costs jumped 22 percent to P4.5 billion, mainly due to overhead costs doubling to P1.2 billion. This was caused by the P1.13-billion penalty imposed by the Metropolitan Waterworks and Sewerage System.

It said that without one-offs such as the regulator-sanctioned and voluntary penalties mentioned, core net income improved by 8 percent to P3.8 billion.

For the Manila concession alone, billed volume declined by 2 percent to 244.9 million cubic meters as a result of the lower water supply and service availability during the first half.

Net income for the Manila concession fell by 25 percent to P2.5 billion.

For domestic operations elsewhere in the country, first-half earnings rose by 31 percent to P303 million, mainly on contributions from subsidiaries Laguna Water and Estate Water.

International operations under Manila Water Asia Pacific saw an 11 percent increase in earnings to P76 million, mainly driven by the equity share of East Water in Thailand.