Manila Water posts Php5.9-B Net Income in 2022
Manila Water posted consolidated earnings of ₱5.9 billion for the full year of 2022. Customer demand showed notable recovery with the improved mobility and resumption of economic activities in its service areas. This was shown by the resurgence of its non-residential segments in the East Zone and performance from several of the domestic Non-East Zone businesses. The recognition of several key items such as the writeback of deferred forex losses and reduction of accounting provisions at the East Zone Concession, further lent upward impact to net income for the year.
On the other hand, the increase in costs and expenses outpaced revenues with the onset of new, recurring costs. Despite these challenges, the Company pushed forward with its CAPEX projects to ensure prudent compliance to regulatory and service commitments, with group CAPEX increasing 36% to ₱22.4 billion for the year.
On a consolidated level, revenues increased 11% to ₱22.8 billion. Growth was supported by the recovery of the East Zone’s commercial and industrial accounts, as well as by the 30% increase in revenues from Manila Water’s Non-East Zone - Philippines businesses. On the other hand, consolidated cost of services and expenses increased 17% to ₱10.8 billion with higher costs in nearly all categories. Fixed costs increased 8%, driven primarily by repairs and maintenance costs as postponed activities catch up from previous periods of quarantine restrictions. The significant topline recovery enabled consolidated EBITDA to increase 9% to ₱12.8 billion for the year. EBITDA margin was held steady at 56%.
At Manila Water’s East Zone Concession, net income was up by 52% at ₱5.5 billion driven by higher revenues. Revenue recovery was mainly supported by the non-residential segment and higher connection fees, as well as cross border charges. Meanwhile, cost and expenses rose 17% for the year with the ramp up of repairs and maintenance, connection, and collection activities, coupled with operating enhancements to comply with new environmental standards. Other income amounting to ₱450 million was recognized with the reduction of provisions related to the Clean Water Act case.
Beyond the East Zone Concession, the company’s Non-East Zone – Philippines group saw its recovery from a net loss position to end the year at ₱137 million in earnings. This performance was supported by 6% billed volume growth, coupled with tariff adjustments and higher contributions from several of its key businesses to drive revenues to ₱5.8 billion. On the other hand, cost and expenses increased 11% to ₱3.5 billion with higher direct and manpower costs. Lastly, for the company’s Non-East Zone – International Businesses, net income decreased 52% to ₱152 million. The decline in income contribution from its East Water business offset the improved performance of the Vietnam businesses. The increase in costs and expenses for the period was driven mainly by higher management and professional fees as the company intensifies its new business development activities.
In November last year, Manila Water secured approval from the Metropolitan Waterworks and Sewerage System (MWSS) for its Rate Rebasing Service Improvement Plan in the East Zone. In said plan, Manila Water committed to invest close to ₱100 billion over the next five (5) years to continue its water supply and network improvement projects, as well as to expand coverage and capacity of its wastewater system.