The following is a summary of the Consolidated Water Co. Ltd. (CWCO) Q4 2023 Earnings Call Transcript:
Financial Performance:
Consolidated Water's 2023 revenue soared to over $180 million with a gross profit of almost $62 million.
The company experienced improved gross margins in the Services segment, owing to effective cost management on the construction of a water recycling plant.
Revenue significantly increased by $69.1 million in the Services segment and showed an increase across all business segments.
A surge in water sales by 15%, driven by increased tourism in Grand Cayman, resulted in increased revenue for the Retail segment.
Consolidated Water reported net income from continuing operations of $30.7 million ($1.93 per share) for the year 2023, quite a rise from the previous year net of $8.2 million ($0.54 per share).
Cash and equivalents totaled $42.6 million at year-end 2023 while working capital reached $88.8 million.
About $5.5 million was disbursed as dividends in 2023 along with an additional $1.6 million in the first quarter of 2024.
Business Progress:
Consolidated Water expanded its U.S. operations through the acquisition of Ramey Environmental Compliance, a company specializing in operating and maintaining water and wastewater treatment plants.
The company successfully managed and completed the construction of a $81 million water recycling plant for Liberty Utilities in Arizona, one which significantly increased their services segment revenue.
In Q4, Consolidated Water initiated site investigations, engineering, permitting, and public outreach in preparation for a 1.7 MGD Seawater Desalination Plant project in Oahu, Hawaii.
Progress was made in their US desalination business with the startup of the seawater desalination and post-treatment pilot plant installations.
Consolidated Water acquired the remainder of PERC, thereby leading to further operational growth while simultaneously pursuing new growth opportunities.
In Grand Cayman, the company commenced operations of West Bay 2, a new retail water utilities one million-gallon per day seawater reverse osmosis plant.
Consolidated Water endeavors to boost future growth, as demonstrated by recent advancements and the upcoming year's outlook especially with strategic initiatives lined up for their O&M business.
The company has an ongoing arbitration process for resolving the issue in Mexico and a pipeline of bid activity.
Smaller upgrade and replacement projects are being pursued, while larger and more meaningful projects ranging from $30 million to $40 million are expected to cycle through in about a year's time.
More details: Consolidated Water IR
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