Water profits lower for first six months
Watlington Waterworks Limited has reported net income of $916,000, for the first six months of the year ended June 30 -- down $193,000 compared to the first half of last year.
In a filing with the Bermuda Stock Exchange, Watlington said that they had previously warned in their report for the year 2020, a forecast that 2021 would be significantly weaker due to a combination of COVID-19 and above average rainfall in the first quarter.
They said the above average rains continued through April further extending the downturn in piped water sales.
Their report continued: “The combined effects of the pandemic induced economic downturn and above average rainfall resulted in piped water sales declining by 25 million gallons or $723,000 representing a 23 per cent drop in sales compared to the same period last year.
“The bottled water division in contrast recorded stronger sales, which were up $109,000 or 5.6 per cent compared to the first six months of the previous year.
“The net outcome has been a decline in earnings of 17.4 per cent through the first six months of this year compared to the previous year.
“It has been reassuring to note that since the rains eased, piped water sales have improved to levels comparable with the same period last year.”
The company said the long-term view is that the current downturn will pass, although with new Covid variants the future remains uncertain at least for the rest of this year.
The company said it remains viable, and the board is confident after over a year of the pandemic that the ongoing infrastructure projects the company initiated earlier this year will enhance its future growth opportunities.
The report continued: “The new reservoir construction is progressing well although the contractor has experienced some material supply chain delays which has become a global phenomenon associated with the pandemic which will inevitably mean the project completion will be delayed.
“The Middle Road pipeline project from Belmont to Barnes’ Corner as part of a shared trenching project with BELCO, who are leading on the project, is proceeding very well and is on schedule.
“After the Middle Road pipeline project is completed, the company will have water mains from Devonshire to Somerset with redundancy to distribute via South Road, Middle Road and Harbour Road. This will augment operations with the new reservoir.
“The company will be able to distribute piped water either from Devonshire westwards or from Southampton eastward and westwards. These projects will remain works in progress through this year and into next year.”
The statement concluded: “The board remains committed to its long-term investment plans, at the same time the board intends to remain sensitive to shareholders by maintaining its dividend, subject to earnings and cashflow.”