Watlington Waterworks Ltd made a full-year profit of $2.77 million in 2018.

In its full-year financial statements posted on the Bermuda Stock Exchange website, Watlington said comprehensive income fell from the record $3.17 million achieved in 2017.

Watlington’s utility division sells water via its network of pipelines to the central and western parishes, while its bottled water division prepares and distributes the Pure Water brand.

Revenue climbed slightly last year, to $12.15 million from $12.06 million in 2017. However, production, administration and distribution expenses all rose to a combined total $9.42 million, up from $8.91 million in 2017.

“The company experienced increased operating costs across the complete spectrum of its operations,” Watlington’s board said in a statement to shareholders.

Watlington said it had invested in upgrades at its seawater reverse osmosis plant and its retail sales and administrative facilities at its Devonshire headquarters.

“Future investment to strengthen bottled water infrastructure is planned through the current year,” the statement added.

Watlington held $8 million in reserve as of the end of last year: $7 million of it earmarked for infrastructure improvements and a further $1 million as a contingency for unexpected future expenditure.

Watlington plans to build a reservoir in the West End. “A search for a site on which to build a significant reservoir to improve overall water production, storage and distribution efficiency was found and the company has been steadily making progress as it goes through the regulatory process to receive permission to develop the site,” Watlington stated. “It is anticipated that the sale will be completed this year.”

Watlington added that it had “benefited from having a long-serving, very able team of Bermudians” and that turnover among staff at all levels had been low. “The board feels investment in human resources is even more important to the ongoing long-term success of the company than its physical infrastructure strengthening policy,” Watlington stated. “It is fully committed to the recruitment and development of its personnel.

“Costs attributed to salaries and benefits for employees are expected to increase in the short-term because of this policy of human resource development and succession planning.”

Directors declared a bonus dividend of 20 cents per share based on 2018 results to all shareholders of record on March 15, 2019. The dividend was paid on March 29, 2019.

Watlington’s shares closed at $21.50 on the BSX yesterday, giving the company a market capitalisation of $22.84 million.