CWC announces 2nd post-Ivan dividend

Consolidated Water Co. Ltd., which provides water in the western portion of Grand Cayman, has announced a fourth quarter cash dividend of 11.5 cents per share.

Originally known as Cayman Water Company, the business changed its name to reflect expansion to the British Virgin Islands, Barbados, Belize and the Commonwealth of the Bahamas.

The company has paid cash dividends to shareholders every year since 1985. The annual rate of dividend payment has never been reduced by the company during this 18-year period, according to a press release.

The release stated that CWC’s board of directors declared the dividend on 22 December. It is payable 31 January 2005 to holders of record at the close of business 31 December 2004.

CWC develops and operates seawater conversion plants and water distribution systems in areas where natural supplies of drinking water are scarce.

In November, the company reported record revenue for the third quarter (July-September) with a decline in net earnings.

Mr. Rick McTaggart, president and chief executive officer, noted at the time, ‘Our retail and bulk water sales were growing at rates that were in line with management’s expectations until Hurricane Ivan arrived in mid-September. The impact of the hurricane upon buildings and property on Grand Cayman Island was devastating with, thankfully, very little loss of life.’

Mr. McTaggart said in November that the company expected water sales to recover during the balance of the year. He pointed out, however, ‘our fourth quarter will undoubtedly reflect additional storm-related costs and below-normal sales from our Grand Cayman customers. Third quarter sales trends within our other markets in the Caribbean were consistent with the Company’s performance during the first half of the year, and we expect a recovery in our business on Grand Cayman to benefit operating results in the upcoming year.’

Referring to the July-September quarter, Mr. McTaggart continued, ‘Because of the manner in which we must account for property damage and lost revenues due to the hurricane, Consolidated incurred significant non-recurring expenses during the most recent quarter.

‘This caused our third quarter net income to decline from prior-year levels, even though we expect to recoup much of the hurricane related costs through payments under our property/casualty and business interruption insurance policies in coming months. Some of these payments will likely be received in the fourth quarter of 2004, and we are cautiously optimistic that our quarterly financial performance in 2005 will more accurately reflect the company’s actual operating results.’

Mr. Jeffrey Parker, chairman of Consolidated Water, expressed pride in the company’s ability to respond in the face of disaster.

‘Ivan was the sixth strongest storm in history and, although significant, the relatively modest damage that we suffered is a testament to the design and construction integrity of our water production facilities,’ he said.

‘This, together with the truly heroic efforts of our employees — many of whom lost their homes and everything they owned – who laboured around the clock seven days a week, enabled us to resume production in an amazingly short period of time despite the lack of a public electricity supply. As investors, we owe them a deep debt of gratitude, as do the people of the Cayman Islands, for averting a potentially severe public health crisis,’ Mr. Parker declared.

Immediately after the storm, it was determined that the company’s seven million gallon water storage tanks appeared undamaged. Further, electric power generators at the Company’s production plants had been designed to allow CWC to distribute the water currently in storage in the event of a disruption in the Island’s public electricity supplies.

By 21 September, the company was able to announce that operations had been restored at three of its Grand Cayman plants, and that water was being supplied to approximately 50 per cent of the customers in the company’s service area.

By 19 October, the company was able to report that it was supplying water to its entire distribution system on a 24/7 basis.

Ocean Conversion (Cayman Ltd), a wholly-owned subsidiary of Consolidated Water, operates the three desalination plants that provide water to the Water Authority for its customers.

The common stock of Consolidated Water Co. Ltd. is traded on the Nasdaq National Market under the symbol “CWCO.” Additional information on the Company is available on its website at http://www.cwco.com/

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