Manila Water reports improving operations; profit flat at ₱2.48 B
The operations of Ayala-led Manila Water Company, Inc. in the provinces and overseas are not doing well in the last months, while its East Zone concession still bears the brunt of last year’s water crisis issue.
In a recent analyst briefing, the listed water utility revealed that its first half income was relatively flat at ₱2.48 billion, increasing by only 1 percent from the ₱2.46 billion it had in the same period last year.
"The lower contribution from domestic subsidiaries, coupled with recognition of additional estimates for various exposures across the group, weighed down on earnings," the company said.
In particular, Manila Water's net income from the East Zone concession, which largely contributes to the company, is also lower compared to last year, settling at ₱3.04 billion.
Comparative figures are not yet available, but the company said lower results for the East Zone concession was “due to the extraordinary expenses last year in line with the raw water shortage.”
In 2018, Manila Water’s overall operations were largely backed by its East Zone concession, but things completely changed for the company in 2019 when its net income for the year declined after it implemented a voluntary waiver program for its customers who experienced days and weeks of water service interruption as well as after paying the government a series of penalties for the said water interruption.
Now, the Philippine government is now bent on overhauling the firm’s concession agreement with Metropolitan Waterworks and Sewerage System (MWSS).
Beyond the East Zone concession, Manila Water Philippine Ventures (MWPV) also posted a net loss of ₱208 million during the first half of this year, on the weight of higher direct costs as well as in personnel and overhead costs.
During the period, several of MWPV’s core subsidiaries “experienced a notable decline,” with businesses and commercial accounts being affected by COVID-19 lockdown restrictions, the company said.
Similarly, the firm’s international business operations under Manila Water Asia Pacific (MWAP) yielded a net loss of ₱320 million over the last six months.
According to Manila Water, the lower performance of associates Saigon Water and East Water hindered overall profitability.
Nevertheless, Manila Water said that it was able to strengthen its network management capability and fast-tracked water supply augmentation projects during the last six months.
These initiatives helped the company maintain water availability at near 100 percent for its customers, with water quality and pressure kept at regulatory levels.
Even amid the challenges posed by the COVID-19 pandemic, Manila Water worked to maintain business operations while safeguarding the health and safety of employees and customers.
At the same time, critical facilities remained operational 24/7 to ensure water availability, as business support and leak repair/ maintenance works continued in response to customer concerns.
“It’s been very challenging for us to work under the conditions posed by the COVID-19 pandemic, but we persevere because we know that we provide an important and basic service. In the end, we know that the solutions we develop to overcome these challenges, will help us serve our customers even better,” Manila Water President and CEO Rene Almendras said.