Razon-led Manila Water Co. reported a 24 percent increase in first-quarter net income, as higher water rates in its primary concession area and regional hubs bolstered the bottom line against rising depreciation and borrowing costs.

In a statement on Friday, May 8, Manila Water said the utility posted a consolidated net income of ₱4.4 billion for the first three months of the year. The earnings growth outpaced an 11 percent rise in consolidated revenues, which reached ₱10.6 billion. 
Manila Water attributed the performance to the implementation of approved tariff adjustments across its East Zone Concession and several domestic business units outside the capital.

Earnings before interest, taxes, depreciation, and amortization (Ebitda) rose 14 percent to ₱7.9 billion. The Ebitda margin stood at 74 percent, while the net income margin improved by four percentage points to 42 percent. These gains were achieved despite the financial weight of an aggressive investment cycle that has increased interest expenses and depreciation charges.

In the East Zone concession, which serves millions of customers in eastern Metro Manila and Rizal province, revenue grew 11 percent to ₱8.5 billion. The segment’s net income climbed 28 percent to ₱4.1 billion, supported by a 76 percent Ebitda margin.

Outside of its flagship concession, Manila Water’s Non-East Zone Philippines unit saw net income surge 56 percent, driven by price hikes in Clark, South Luzon, and Boracay, alongside higher supervision fees from its Laguna and Estate Water businesses.

The utility spent ₱2.8 billion on capital expenditures during the quarter, focusing on water supply security and system reliability. These investments are part of a broader strategy to mitigate risks associated with volatile market conditions and shifting climate patterns.

Manila Water is specifically preparing for the anticipated impact of the El Niño weather phenomenon later this year. The company’s readiness plan includes diversifying water sources, optimizing treatment capacity, and preparing deep wells and mobile delivery systems to counter potential rainfall shortages.

The company’s deliberate approach to infrastructure build-up is intended to reduce vulnerabilities and support long-term growth, according to Manila Water President and Chief Executive Officer Roberto R. Locsin.

“With economic challenges and the threat of El Niño on the horizon, we fulfill our service obligations from a position of preparedness—backed by diversified sources, reinforced assets, and rigorous contingency planning,” he said.

He noted that the company’s earnings strength provides a buffer against inflationary and operating headwinds, allowing the utility to fulfill service obligations from a position of preparedness. (Gabriell Christel Galang)