Consolidated Water increased total first quarter revenues by 17% and gross profit by 13% compared to the same period last year.
Higher manufacturing and retail revenues were partially offset by marginally lower bulk and services revenues.
The decrease in bulk revenues was due to lower rates that came into effect in February for water supplied from the company’s Red Gate and North Sound plants.
The net income attributable to shareholders increased to $6.2 million or $0.41 per diluted share, based on improved operating income and gains from the sale of discontinued operations in Belize.
“In Q1, we realised double-digit revenue and gross profit growth, which was driven primarily by increased production activity in our manufacturing business segment,” said Consolidated Water CEO Rick McTaggart. “We expect this growth in manufacturing activity, as compared to last year, to be maintained over the remainder of the year.”
During the first three months of 2019, the company was awarded a new seven-year bulk water supply agreement from the Water Authority Cayman for its North Side Water Works desalination plant, beginning on 1 July.
“The agreement secures our position as the dominant desalinated water producer in the Cayman Islands for the next several years,” McTaggart said.
The company also completed the expansion of the water production and storage capacity of the Abel Castillo Water Works plant in the West Bay and Seven Mile Beach area, and began utilising the new resources in March.
Completing the expansion of the Abel Castillo Water Works plant would ensure that the company can meet future water supply needs of retail water customers in Grand Cayman, McTaggart said.
The developer and operator of desalination plants also completed the sale of a subsidiary in Belize for $7 million, and repatriated more than $12 million in cash to be used to support growth and M&A initiatives.
“Supported by a strong balance sheet and ample liquidity, both of which have continued to improve, we are focused on expanding our businesses into new markets and complementary product lines,” the Consolidated Water chief executive said. “This includes actively evaluating acquisition targets in North America that would expand our geographic footprint and diversify our revenue streams.”
Consolidated Water’s project of constructing and operating a seawater desalination plant and distribution pipeline in Rosarito, Mexico, saw two positive developments in the first quarter. A major lender approved up to $200 million in debt financing, and the state of Baja California’s congress renewed key authorisations required for the project.
McTaggart said the authorisations allow the state to obtain the credit facility it needs for the project. “We can now proceed to several important next steps before beginning the construction phase, including securing the remaining required debt financing and aqueduct rights-of-ways.”
The project is designed to produce 100 million gallons of potable water each day. The plant is expected to be the largest of its kind in the Western Hemisphere.