Consolidated Water registers first-quarter profit

Cayman Compass is the Cayman Islands' most trusted news website. We provide you with the latest breaking news from the Cayman Islands, as well as other parts of the Caribbean.
Cayman Compass is the Cayman Islands' most-trusted news website. We provide you with the latest breaking news from the Cayman Islands, as well as other parts of the Caribbean.

Consolidated Water Co. Ltd. recorded increased profitability in all four of the company’s reporting segments in its 2017 first-quarter report – compared with the equivalent 2016 period.

The May 10 document said the company’s net income reached $2.6 million and 18 cents per share during the quarter, compared to $2 million and 14 cents per share in the first quarter of 2016.

The statement attributed the rise to higher gross profits, which reached $6.83 million compared to $6.17 million in 2016’s equivalent period in the retail, bulk and manufacturing segments.

The services segment, the report said, remained relatively steady, recording revenues or $130,252, compared with $180,712 in 2016, although registering a $28,086 gross profit in the sector compared with a loss of $16,563 in 2016. The document ascribed the boost to an approximately $90,000 reduction in employee costs.

The water company’s CEO, Rick McTaggart, said he was gratified by an 8 percent improvement in retail sales, which reached $6.4 million in the first quarter, compared with $5.9 million a year earlier.

Gross profit in the segment hit nearly $3.8 million – 56 percent of revenues – compared to $3.3 million – also 56 percent of revenues – in 2016. Mr. McTaggart attributed the growth in gross profit to an increase in sales volume and continuation of drought conditions from last year.

“We are particularly pleased to report that the trend of increased volume sales in our retail segment that started last year is continuing into 2017,” he said, “which is consistent with the 12 percent increase in sales volumes we experienced for the full year of 2016.”

Bulk segment revenues were nearly $7.7 million in 2017, compared to $7.2 million in 2016. The report credited the growth to the water company’s Bahamian operations, which generated an additional $444,000 in revenue due to an increase in the price of diesel fuel and electricity, passed along to consumers.

Manufacturing gross profit reached $338,551 – 25 percent of revenues in the segment – in 2017 compared to $198,061 – 32 percent of manufacturing revenues – in 2016.

The company’s manufacturing segment consists chiefly of the Florida-based Aerex Industries, Inc., which builds and installs water-treatment systems for the water and wastewater industry.

The water company acquired 51 percent of the Fort Pierce outfit in February 2016, so 2017 results for the manufacturing segment are not readily comparable to those for 2016.

Mr. McTaggart said the company continued to seek a resolution to regulatory uncertainty as legislation sought to transfer industry oversight from CWCO’s government-affiliated Water Authority – Cayman competitor to the new Utility Regulation and Competition Office.

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