Manila Water registered a strong performance for the first quarter of 2018, posting double-digit net income growth of 17 percent from the previous year to reach P1.69 billion. This robust growth is supported mainly by the Manila Concession, coupled with the continued expansion of operating subsidiaries under Manila Water Philippine Ventures (MWPV). Continuing infrastructure build-up resulted in a 63 percent growth in consolidated capital expenditures for the period, as recent wins on new business development efforts begin to gain traction.

On a consolidated level, Manila Water posted healthy topline growth for the period, growing 8 percent from the previous year mainly due to higher water volume sold (billed volume) and higher supervision fees. Other income grew by 69 percent to P153 million, largely driven by the higher equity stake in net income of associates. Income contribution of international subsidiaries increased by 26 percent from the previous year, with the new acquisitions in Thailand and Indonesia already making respective contributions. On the other hand, cost of services and operating expenses increased by 19 percent to P1.78 billion, as business development costs for the implementation of Manila Water’s growth strategy contributed to the increase. Direct costs went up due to higher repairs and maintenance expenses.

Manila Concession billed volume grew by four percent, driven by an increase in billed connections to total nearly 970,000, as well as a noted uptake in per capita consumption. Average tariff likewise increased to P30.30 per cubic meter, following the implementation of the 2.8 percent CPI adjustment effective January of this year. Capital expenditures growth continued for the period, reaching P2.9 billion – an 81 percent increase from the same period last year.

Meanwhile, the domestic subsidiaries under MWPV contributed to a 23 percent growth in revenues to P876 million, mainly driven by a 4 percent growth in consolidated billed volume, as well as higher average tariff levels in key subsidiaries Laguna Water (8 percent) and Boracay Water (24 percent). On the other hand, operating costs saw a 35 percent increase from the previous year, largely driven by business development and repairs and maintenance costs for newly-acquired projects. MWPV maintains its healthy growth trajectory with a net income contribution increase to P167 million, 14 percent better than the same period last year. In line with this, MWPV recently received Notices of Award from two water districts in the Province of Bulacan for 25-year concessions which will implement water and used water projects in the municipalities of Balagtas and Bulakan.

The international subsidiaries under Manila Water Asia Pacific (MWAP) saw a 26 percent increase in equity share in net income of associates. All foreign subsidiaries posted higher revenues, coupled by additional contributions from new acquisitions East Water in Thailand, as well PT Sarana Tirta Ungaran in Indonesia. On the other hand, operating expenses increased to P44 million, mainly due to interest expense for loans to finance recent acquisitions. Net income for the period stood at P58 million.

Ferdz dela Cruz, Manila Water President and CEO, stated: “We are pleased with the results of our efforts early this year, as it is the result of the groundwork we have laid for future growth. As we continue to build our business both domestically and in the region, we realize the importance of building a strong core, while remaining agile to adapt to various market conditions. We have worked hard to prepare ourselves to take on these new challenges, and we are excited to explore the new opportunities which lie ahead.”

For more details, please click the following links:

• 1Q2018 Analysts’ Briefing Presentation
• 1Q2018 Form 17-Q
• 1Q2018 Form 17-C