Consolidated Water reported a 5% increase in retail revenue and a 13% bulk revenue growth in the third quarter 2021, compared to the same period last year.
Overall, however, revenue for the third quarter declined by 7% to $16.4 million year-on-year, as services and manufacturing revenues decreased by $141,000 and $2.2 million, respectively.
Consolidated Water CEO Rick McTaggart said the small increase in the retail segment was caused by the absence of tourism on Grand Cayman because of the pandemic.
Third quarter retail revenue was based on only a 1% higher volume of water sold and remained far below historical levels, he noted.
The planned 20 Nov. opening for vaccinated travellers, McTaggart said, was “a major step” toward the reopening of hotels and resorts in Grand Cayman and “a gradual return to normalcy” for the company’s retail water segment.
Meanwhile, the Bahamas remains open to tourism with increased marketing activity to tourists, he said.
McTaggart noted that the bulk water segment with a revenue of $6.9 million had performed much better than anticipated.
Yet much of the bulk segment revenue was attributable to an increase in energy costs for Consolidated Water Bahamas, which increased the energy pass-through component of CW-Bahamas’ rates.
The manufacturing revenue generated by the company’s Aerex subsidiary dropped in the wake of reduced orders from one major customer.
McTaggart said the manufacturing segment was also impacted by supply chain challenges such as material shortage, price increases and logistical delays.
“This has pushed out to next year certain orders we had expected to complete in the last half of 2021. As a result, we expect revenue for our manufacturing segment for the second half of 2021 to be about equal to the first half.”
However, the Consolidated Water CEO said that all manufacturing revenue was derived from new products or customers during the first nine months of the year.
During the first three quarters, services revenue increased by 6% to $10.5 million. The segment now accounts for 21% of overall revenue compared to only 17% during the same period last year.
“This was driven by growth in our PERC Water subsidiary,” McTaggart said. “During the quarter, PERC continued to grow its recurring revenues by signing a five-year contract to provide operating and maintenance services for the wastewater plant of a gaming and live entertainment business in Southern California.”
He added that PERC is bidding for two major projects which will be awarded early next year.
“We believe PERC’s performance for 2022 will exceed this year as new water treatment projects come to market after the lull due to the pandemic.”
Consolidated Water’s gross profit in the third quarter decreased 8% to $5.7 million and net income from continuing operations dropped to $1.4 million from $1.8 million during the same period last year.
Net income attributable shareholders, including discontinued operations, fell to $286,000 for the quarter down from $1.4 million in 2020.
During the first nine months of 2021, Consolidated Water revenue has dropped by 13% to $50.2 million.
This was driven by decreases of $1.6 million in the retail segment and $7.7 million in the manufacturing segment, which were partially offset by increases of $1.5 million in the bulk segment and $572,000 in the services segment.
The volume of water sold for the year to date was 9% lower than during the same period last year.
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