Higher retail water revenues offset lower bulk water sales for Consolidated Water in the second quarter of 2014, resulting in flat net income attributable to shareholders compared to the same period last year.
“Our second quarter net income was comparable with that for the prior-year period while we continue to make progress on the large seawater desalination project that we are developing in northern Baja California, Mexico,” said Rick McTaggart, chief executive officer of Consolidated Water.
He said the company had reached an important milestone when it submitted an environmental impact study to Mexican regulators for its Rosarito desalination plant project in Baja California.
“We expect to receive comments on these studies within the next several weeks. We are also implementing a second phase of source water quality monitoring and reporting, which is required by one of our proposed water customers, Otay Water District, to support its permitting applications with state and federal authorities in the USA,” he said.
In May the water company purchased two parcels of land through its Mexican subsidiary N.S.C. Agua S.A de C.V. for the proposed 100 million gallon-per-day reverse osmosis desalination plant, which aims to deliver water to the Mexican potable water system and via a pipeline to the U.S. Consolidated Water’s net income totaled $2,759,693 and remained at $0.19 per diluted share, down from $2,853,850 during the same period last year. Total revenues for the second quarter 2014 increased by 2 percent year-on-year to approximately $16.9 million.
Retail water revenues grew 5 percent compared to the same period in 2013 to approximately $6.5 million. The increase in retail revenues, which represent 38 percent of total revenues, was due to an approximate 8 percent increase in the number of gallons of water sold by the company’s retail operations in the Cayman Islands and the Consolidated Water’s facility in Bali, Indonesia.
“This increase was primarily attributable to higher irrigation demands from golf courses in our franchise areas on Grand Cayman, along with higher water production at our newest seawater desalination plant, in Bali, Indonesia. Water sales by our operation in Bali increased as resorts and other properties purchased more water to offset dry weather conditions and deteriorating quality of ground water wells,” Mr. McTaggart said.
Meanwhile, Consolidated Water’s bulk water revenues declined 2 percent to about $10 million and gross profit dropped 1 percent year-on-year due to a lower quantity of water sold in the Bahamas.
“The revenue decline in the Bahamas resulted from lower water volumes sold to [the Water and Sewerage Corporation of the Bahamas] as a result of its successful efforts to reduce the amount of water lost by its distribution system,” Mr. McTaggart noted. “The impact of this development was largely offset by higher bulk water volume sales in the Cayman Islands and Belize, as well as improved operating efficiencies at our bulk water production facilities.”
Revenues in the services segment more than doubled to $466,381 in the quarter compared to the same period last year, due to construction revenues from contracts to refurbish the Lower Valley plant on Grand Cayman and to build a plant on the island of Cayman Brac.