Manila Water Company reported an 18 percent drop in consolidated earnings to P3.7 billion for 2021 as the full-year effect of the COVID-19 pandemic impacted customer demand and business operations.
In a disclosure to the Philippine Stock Exchange, the firm said profits dropped even as domestic and international operations outside the East Zone Concession showed improved performance.
Despite the challenges, including an ongoing tariff freeze, the company pushed through with its projects to ensure prudent compliance to regulatory and service commitments, with group capital expenditure at nearly P17 billion for the year.
On a group level, revenues declined four percent to P20.3 billion due to lower billed volume across all segments in the East Zone Concession and in several domestic subsidiaries, with the full-year impact of COVID-19 restrictions significantly affecting customer consumption.
Cost and expenses for the period stood at P9.2 billion in 2021, up seven percent from last year, as business and operating activities ramped up coming from restrictions imposed under the Enhanced Community Quarantines (ECQ) in 2020.
This increase was partially offset by lower power and chemical costs in line with lower production during the period.
For its operations in the East Zone Concession, 2021 saw revenues decline by six percent to P9.2 billion, mainly driven by a four percent decline in billed volume.
Meanwhile, cost and expenses rose by 11 percent to P5.5 billion for the period, driven by the resumption of repairs and maintenance, collection, connection, and sanitation activities with the relative easing of ECQ restrictions from the previous year.
These activities are in compliance with increasing service obligations in the East Zone Concession, even as it continues to operate under a tariff freeze on implementing approved adjustments.
Despite the challenges posed by ECQ restrictions on project execution, the East Zone Concession continued with its capital expenditure program, consequently posting nearly P14 billion worth of projects for the year.
These projects focus on water supply, network reliability and wastewater expansion in line with the fulfillment of service obligations under its Service Improvement Plan.
These projects will further augment available water supply to East Zone Concession customers and ensure reliable water service, with continued collaboration with key government agencies MWSS, NWRB and NIA.
East Zone Concession customers currently continue to experience 24x7 water supply but the growing demand will require investments in additional infrastructure.
Looking at the businesses outside the East Zone Concession, Manila Water Philippine Ventures (MWPV) saw improvement in profitability with the good performance of its North Luzon and Central Luzon clusters.
Specifically, MWPV’s Laguna Water saw a two percent growth in billed volume, driven by the increase in consumption with the energization of its Laguna Wellfield.
For Manila Water Asia Pacific (MWAP), equity share in net income of associates more than doubled in 2021, with improved performance from East Water in Thailand, as well as by bulk water supply operations of Thu Duc Water and Kenh Dong Water in Vietnam.