Consolidated Water revenues were down 13 per cent at $50.7 million in 2010, the company reported in its operating results for the year.
Net income attributable to shareholders improved slightly from $6.09 million or $0.42 per diluted share to $6.29 million $0.43 per diluted share.
Although Consolidated Water’s operating income declined in 2010, this was offset by improved operating results at the company’s BVI-affiliate Ocean Conversion and the absence of impairment charges related to this entity, which depressed consolidated operating income in 2009.
The impairment charges resulted from a contractual dispute over OC-BVI’s Baugher’s Bay plant with the BVI government that is now resolved.
Consolidated gross profit in 2010 decreased 28 per cent to approximately $16.6 million, or 33 per cent of total revenues, compared to approximately $23 million, or 40 per cent of total revenues, in 2009.
“2010 profitability was negatively impacted by incremental and significant administrative costs incurred by our Mexican affiliate, which is pursuing the development of a 100 million US gallon per-day project in northern Baja California, Mexico,” Consolidated Water CEO Rick McTaggart said.
“Our retail water sales declined last year, reflecting a rate reduction of more than 7 per cent in January 2010 and a lower volume of water sales due to a soft economy in Grand Cayman,” he noted.
“We are encouraged, however, by recent signs of recovery, including a 17 per cent increase in retail water sales in our franchise area, along with gains of approximately 6 per cent in both air and cruise ship passenger arrivals to Grand Cayman during the month of January 2011
when compared with the prior-year period,” Mr. NcTaggart added.
In the bulk water business segment, he sees a positive development from the new contract to extend the capacity of the company’s Blue Hill plant in Nassau, Bahamas, which will increase the company’s total water production capacity by 21 per cent from the fourth quarter of 2011.
The profitability of Consolidated Water’s services segment was adversely affected by “a lull in new project activity during 2010”, which the company attributed to the economic downturn.
Meanwhile, Consolidated Water continues to negotiate a new retail water franchise in Grand Cayman with the Cayman Islands government, Mr. McTaggart said.
“This process has taken longer and been more difficult than anyone anticipated. However, we continue to meet with the government negotiating team on a regular basis, and we are optimistic that a satisfactory conclusion to the negotiations will eventually be forthcoming,” he said.
Consolidated Water (NASDAQ: CWCO) recently announced that its board of directors had declared a quarterly cash dividend of $0.075 per share.
The dividend is payable 30 April, 2011, to shareholders of record at the close of business 1 April, 2011.
The Company also announced plans to host its Annual General Meeting of shareholders on 24 May at 10am at the Marriott Beach Resort on Seven Mile Beach.
Shareholders of record as of 25 March are eligible to vote at the meeting.