Consolidated Water Co. Ltd. (CWCO) Q4 2013 Earnings Conference Call March 18,
From Seeking Alpha
Good morning, and welcome to the Consolidated Water Company 2013 Operating Results Conference Call.
Forward statements warning …….
And I would now like to turn the conference over to Rick McTaggart. Please go ahead.
Frederick McTaggart – President and CEO
Thank you, Amy. Good morning ladies and gentlemen. Thank you for joining us at our 2013 Full Year Earnings Conference Call.
Net income during 2013 was approximately $8.6 million compared to approximately $9.3 million in 2012, and this decline resulted from a decline in earnings from our investment in our BVI affiliate, which had totaled $2.46 million in 2012 and reduced to $1.34 million in 2013.
In 2012, we had received proceeds from compensation that was awarded to us by the courts in BVI for the Baughers Bay litigation amounting to $4.7 million, and that reduced to $2 million in 2013.
Retail water revenues declined by about 5% or $1.2 million this past year, due to an 8% decline in the number of gallons sold in our Cayman retail operations, when compared to 2012. Reason for this continued decline and volume sales, which happened over the past three years is confounding, given that economic conditions and tourism numbers continue to improve in the Cayman Islands. In fact, their tourist arrivals were up about 9% in 2013, and we typically use that as an indicator for our water usage in our service areas, primarily, hotel tourism consumption. We are currently speeding with some of our customers in Grand Cayman to determine what factors may be contributing to this decline in sales volumes. Gross profit of our retail segment through the year decreased by 5% or about $700,000 on lower revenues.
Now looking to the future, construction work continues on several new developments within our retail service area in Grand Cayman, and we expect these new developments, when completed, to favorably impact our retail water sales. The water colors development is a 60-unit luxury private residence project, that would be opened later this year, and the Kimpton Hotel, which is a hotel condominium property with 250 hotel rooms and 52 condo units, and that’s expected to open in 2016.
In addition to these large hotel condo projects that are coming online in the near future, recent articles in the local press have highlighted a high end residential building boom that is underway, specifically in our service area, which indicates that recent changes in the country’s immigration laws have been successful in attracting high net worth individuals back to reside in the Cayman Islands.
For more on this story go to:
