Fall in water sales hits Watlington profits
Watlington Waterworks Ltd’s profits fell in the first six months of the year, as piped water sales dipped.
In the company’s report to shareholders for the first half of 2019, Watlington said rainfall that was three inches higher than the same period of last year dampened demand for piped water. However, sales of all other products and services increased.
Watlington’s profits for the six months through June 30 totalled $1.3 million, down from $1.41 million in the corresponding period of 2018, according to financial statements filed with the Bermuda Stock Exchange.
Revenue slipped to $5.62 million from $5.79 million, as a $202,000 decrease in water sales was partially offset by gains in other areas.
Watlington said its Utility Division, which supplies piped water as a supplement to rainfall harvesting, generates 65 per cent of revenue.
“The company’s results therefore have a strong inverse correlation to rainfall,” Watlington wrote to shareholders.
“In years when rainfall is below average one can expect stronger results and vice versa. For the first six months of this year rainfall was more than three inches above last year. This created softer demand for our piped water product, which resulted in piped water sales being down compared to last year.
“This was offset to some extent by increased sales from both our bottled water and retail plumbing divisions improving from the same period last year.”
The company said it was continually connecting new customers to its pipeline network and had to invest in infrastructure.
“The company completed the purchase of a parcel of land in Southampton on which it is intended to build a new large reservoir and water treatment building,” Watlington stated.
“Excavation of the site commenced during the second quarter. Plans for the structure are well advanced with the aim to commence construction sometime in the first half of next year.
“This total project will involve significant capital investment in our infrastructure to meet customers’ current and future demand.”
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