Manila Water 2019 profit down by 16%
The water supply crisis felt last year in the national capital, which sent Manila Water group through a cataclysm, did not dislodge
the Ayala-led business as it posted a profit of P5.5 billion in 2019, only 16 percent less than the 2018 level, thanks to mitigating contributions by its operations elsewhere in the country.Manila Water Co. Inc. said in a statement the drop in consolidated net income “has been anticipated” considering the operational problems they faced resulting from the water level at the La Mesa Dam in Quezon City dropping below critical level.
This, in turn, resulted in franchise-wide, hourslong service interruptions and—for the worst affected—no water for at least seven days in March 2019.
In the second quarter last year, Manila Water implemented a voluntary bill waiver program, which was a self-imposed penalty that was followed by fines imposed by the Metropolitan Waterworks and Sewerage System (MWSS). The bill waver implemented last April slashed revenue by P353 million while the MWSS-imposed penalty rang up at P534 million.
The company said that even as it paid the MWSS penalty, it maintained that it “has no liability on the penalty’s basis as it was not the root cause of the water supply shortage.”
Manila Water added that as part of efforts to address the problem, it reconfigured its distribution network operations to maintain service availability, with at least seven pounds per square inch of pressure— enough to reach the ground floor level of a customer’s premises.
“We are thankful for the untiring efforts of our employees and continued support of our stakeholders throughout the challenges last year,” said company president and chief executive Rene Almendras.
“Their trust and dedication are solid proof that foremost of our commitment is providing service to our customers even in the face of overwhelming obstacles beyond our control,” Almendras said.
The Manila concession-based business alone chalked up a P5.1-billion net income, a decrease of 22 percent.
Subsidiaries that operate elsewhere in the country helped shore up company, such as Manila Water Philippine Ventures, which posted a 131-percent surge in net income to reach P450 million.
This was mainly due to a strong performance among Estate Water that cater to real estate developments as well as Laguna Water and Boracay Water. More recently, amid the continuing verbal attacks of President Duterte against the Ayala family, Manila Water announced the sale for P10.7 billion of a 25-percent stake in the company to Razon group’s Trident Water.
Manila Water assigned to Trident proxy rights, such that the Razon group would have a 51-percent interest in the MWSS concessionaire. The Razon group has announced a tender offer to buy shares from other shareholders at P13 a share.
The deal with Trident would take effect after the company’s annual stockholders meeting scheduled this April 17, and “after regulatory approvals.”
