Nov. 11, 2014 3:11 PM ET | About: Consolidated Water Co. Ltd. (CWCO)

Operator

Good morning, and welcome to the Consolidated Water Company’s Third Quarter 2014 Operating Results Conference Call. All participants will be in listen-only mode. (Operator Instructions)

This conference call may include statements that may constitute forward-looking statements, usually containing the words believe, estimate, project, intend, expect, or similar expressions. These statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements.

Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the company’s products and services in the marketplace, changes in its relationship with the governments of the jurisdictions in which it operates, the ability to successfully secure contracts for water projects in other countries, the ability to develop and operate such projects profitably and other risks detailed in the company’s periodic report filings with the Securities and Exchange Commission.

By making these forward-looking statements, the company undertakes no obligation to update these statements for revisions or changes after the date of this conference call. Please note, this event is being recorded.

I’d now like to turn the conference over to Rick McTaggart. Please go ahead.

Frederick McTaggart – CEO

Thank you, [Kate] (ph). Good morning, ladies and gentlemen, thank you for joining us on our third quarter earnings call this morning. David Sasnett, the CFO of Consolidated Water is also on the call with me this morning.

The company’s net income this past quarter more than doubled to approximately 1.9 million or $0.13 per share compared with approximately 900,000 or $0.06 per share in the third quarter of 2013. This increase in earnings was due to higher water volume sales in our retail business in Grand Cayman, and lower development cost for our project in Baja California, Mexico.

Retail segment revenues from our Grand Cayman operation increased by 18% to 5.9 million this past quarter, compared to 5 million in the third quarter of last year, due to a 17% increase in the volume of water sold.

We’re encouraged that retail water sales have increased during the past two consecutive quarters relative to prior year periods, which reverse the three-year declining sales trend that began in 2010. Dry weather conditions and an increase in tourist arrival seem to have contributed to the turnaround.

According to a government statistics, the number of stay-over tourists in the Cayman Islands was up by more than 20% this past quarter compared with third quarter of 2013.

Gross margin in our retail business increased by approximately 600,000 on these higher revenues.

As we reported last quarter, the judicial review hearing related to our retail license negotiations with the Water Authority and the Cayman Islands government was held on April 1st of this year. Prior to the commencement of this hearing, the parties agree that the core should only be asked to interpret certain provisions, because of the Cayman Islands water legislation that was passed in early 2011, and as part of the agreement, the water authority also agree to consider our submissions on their RCAM model and/or alternative pricing models for our retail concession.

These submissions were made to the Authority on June 9th, and subsequently on September 11, we received a letter from the Authority which fully rejected our submissions and stated that Water Authority intends to provide the company with the draft RCAM license in due course.

SOURCE: http://seekingalpha.com/article/2671025-consolidated-waters-cwco-ceo-frederick-mctaggart-on-q3-2014-results-earnings-call-transcript

See also iNews Cayman story published November 12 2014 “Consolidated Water Co. Ltd. reports higher third quarter revenue and earnings” at: http://www.ieyenews.com/wordpress/consolidated-water-co-ltd-reports-higher-third-quarter-revenue-and-earnings/