Water Corp Success Costs Supplier $8.1m
Consolidated Water’s Bahamian revenues have decreased by more than $8 million over the past two years, as the Water & Sewerage Corporation’s leak and loss reduction programme bears fruit.
“The BISX-listed water producer, in its annual 10-K report filed with the US Securities & Exchange Commission (SEC) this week, revealed that its Bahamian revenues for 2015 had dropped by $5.641 million year-over-year.
“It blamed the decline largely on a 13 per cent reduction in water volumes purchased from its New Providence-based Blue Hills and Windsor reverse osmosis plants by the Water & Sewerage Corporation, which is able to buy less due to the drop in losses from its system.
“When added to the $2.5 million year-over-year decline in Bahamian revenues in 2014, Consolidated Water has seen some $8.141 million shaven off the 2013 top-line it earned in this nation.
“Bulk segment revenues were $31.854 million and $39.201 million for 2015 and 2014, respectively,” the BISX-listed water producer said.
“The decrease in bulk revenues from 2014 to 2015 is principally attributable to our Bahamas and Cayman operations, whose revenues decreased by approximately $5.641 million and $1.532 million, respectively.
“The 2015 revenue decrease for our bulk operations resulted from significant decreases in the prices of diesel fuel and electricity from 2014 to 2015 that reduced the energy component of our bulk water rates, and declines of 13 per cent and 3 per cent in the volumes of water sold by our Bahamas and Cayman operations, respectively,” Consolidated Water added.
“These lower volumes of water sold by our bulk operations in 2015 reflects the continuing water conservation and loss mitigation efforts of the Water and Sewerage Corporation of the Bahamas, and a decrease in purchases by the WAC [in the Cayman Islands].”
“The Water & Sewerage Corporation reduced total purchases from Consolidated Water’s plants from 4.3 billion gallons in 2014 to 3.7 billion gallons last year.
“It has been able to reduce its purchases from Consolidated Water through an $81 million project financed by the Inter-American Development Bank (IDB), which engaged Miya as the contractor to reduce losses from its system before the water reached customers’ residences.
“Meanwhile, Consolidated Water’s 10-K filing revealed that the Water & Sewerage Corporation owed it $4.7 million as at its December 31, 2015, year-end.
“From time to time, Consolidated Water Bahamas has experienced delays in collecting its accounts receivable,” the filing with the SEC said.
“However, during 2014, the Government of the Bahamas made significant incremental payments on its outstanding balances due to Consolidated Water Bahamas, and since such time Consolidated Water-Bahamas’ accounts receivable from the Water & Sewerage Corporation, which totalled approximately $4.7 million as of December 31, 2015, have not been delinquent.
“Representatives of the Bahamas government have informed us that previous delays in paying our accounts receivables did not reflect any type of dispute with us with respect to the amounts owed,” Consolidated Water said.
“To date, we have not been required to provide an allowance for any delinquent Consolidated Water Bahamas accounts receivable, as such amounts were eventually paid in full.
“Based upon our experience, we believe that the accounts receivable from the Water & Sewerage Corporation are fully collectible and therefore have not provided any allowance for possible non-payment of these receivables as of December 31, 2015.”
“Consolidated Water’s filing also revealed that the Christie administration is still no nearer to a decision on who the Windsor plant’s long-term operator should be almost three years after the issue arose.
“The BISX-listed water supplier is continuing to operate the plant on a month-to-month basis, while the Government endeavours to make it its mind on whether to provide it with a new five-year contract or hire someone else.
“The Windsor water supply agreement was scheduled to expire in July 2013, but has been extended on a month-to-month basis while the Bahamas government determines whether or not to enter into a new supply contract with us,” Consolidated Water said.
“At the request of the Government of the Bahamas, we continue to operate and maintain the Windsor plant on a month-to-month basis to provide [it] with additional time to decide whether or not it will extend Consolidated Water Bahamas’ water supply agreement for the Windsor plant on a long-term basis.
“Consolidated Water Bahamas generated revenues from the operation of this plant of approximately $5.8 million, $6.2 million and $7.2 million during the years ended December 31, 2015, 2014 and 2013, respectively.”