Manila Water posts 6% Net Income increase in first nine months of 2021
Manila Water posted earnings of ₱3.4 billion for the first nine months of 2021, 6% higher than the same period for the previous year. The improvement was driven mainly by the significant increase in contribution from the Company’s international affiliates and key domestic subsidiaries, as well as lower provisions for income tax in compliance with the CREATE Law.
On a group level, Manila Water revenues declined 5% to ₱15.3 billion due to lower billed volume in the East Zone Concession and in several domestic subsidiaries, with the continuing impact of COVID-19 restrictions being felt across the company’s customer base. This decline in revenues was partially offset by the strong performance from the international affiliates, with Equity Share in Net Income of Associates growing by more than 4 times versus last year to ₱486 million.
Manila Water’s cost and expenses for the period stood at nearly ₱6.2 billion, up 7% from a year ago, driven the catch-up of business and operating activities which were suspended during the Enhanced Community Quarantine (ECQ) last year. This increase was partially offset by lower power and chemical costs in line with lower production during the period, as well as the 40% decline in provision for income tax with the adoption of the CREATE Law.
On the performance of the major business units, The East Zone Concession registered a 4% decline in billed volume for the period. This was driven largely by lower consumption in the commercial and industrial segments with the continued impact of COVID-19 restrictions. Despite the challenges posed by COVID-19 the East Zone Concession continued with its mandated capital expenditure program, consequently executing nearly ₱7.0 billion worth of projects for the period. Said projects are mainly for wastewater expansion, network reliability and water supply projects in line with the fulfillment of service obligations under its Service Improvement Plan.
The growth in Manila Water Asia Pacific (MWAP) and improvement in Manila Water Philippine Ventures (MWPV) offset the decline in the East Zone Concession. Specifically, growth in MWAP came by way of a higher equity share in the net income of associates, notably from East Water (Thailand), Thu Duc Water (Vietnam) and Kenh Dong Water (Vietnam). This was coupled with the additional contribution from the Management, Operations and Maintenance contract with the National Water Company in the Kingdom of Saudi Arabia. The improvement in contribution of MWPV was driven by the good performance of its domestic subsidiaries for the period, such as Laguna Water and Clark Water.
Manila Water President and CEO Jocot de Dios expressed optimism of gradual billed volume recovery to pre-pandemic levels, particularly in the East Zone service areas with the easing of quarantine restrictions and the opening up of the economy with the reduced COVID threat. “As commercial and industrial establishments begin to expand their operations as a result of the downgrade of IATF alert levels, we are hopeful that consumption will show an upward trajectory especially with the coming holiday season,” added de Dios.
“Despite the challenges brought about by the pandemic, we are also extremely excited with the addition of the Pangasinan bulk water project to our local ventures as well as the second water contract for the Eastern Cluster in the Kingdom of Saudi Arabia. These twin developments are perfectly aligned with Manila Water’s vision of being recognized as a global Filipino company in the field of water and wastewater services,” De Dios said.