Management Commentary

President and CEO Rick McTaggart commented: “Our core desalination business continued to perform well in the second quarter, and revenues in our manufacturing segment nearly doubled on an unconsolidated basis. However, similar to the first quarter, a portion of our manufacturing segment’s production, equivalent to $1.1 million in the second quarter and$1.8 million year-to-date, was allocated for our internal use in the refurbishment of our Windsor plant in the Bahamas and our Governor’s Harbor plant in the Cayman Islands, and was not recognized as revenue. These internal projects have obscured the year-over-year improvement in our manufacturing segment. Looking forward, we expect manufacturing sales to continue to improve based on orders in hand for the remainder of this year.”

“We made significant progress on our Rosarito project during the second quarter by achieving several important milestones. Specifically, (i) we signed an amended public private partnership agreement, which addressed foreign currency exchange and interest rate adjustment concerns related to the project; (ii) we obtained additional rights of way for the project’s aqueduct and now have the majority of such rights of way required for the project; and (iii) we signed the turn-key engineering, procurement and construction contract with Suez for the desalination plant and aqueduct. These accomplishments have moved us forward in line with our expectations for completion of the conditions of the project,” Mr. McTaggart noted.

Second Quarter 2018 Financial Results

Total revenues for the second quarter 2018 were $15.9 million, representing a 3.9% increase from $15.3 million in the second quarter of 2017. Gross profit amounted to $6.6 million, compared to $6.5 million in the year ago quarter. Inclusive of $0.7 million in Rosarito-related expenses, net income attributable to Consolidated Water stockholders was$2.2 million, or $0.14 per fully diluted share, compared to $0.6 million, or$0.04 per fully diluted share, reported in last year’s comparable quarter. In the second quarter of 2017, the Company recorded an impairment loss of $1.0 million relating to its Bali operations, however this subsidiary did not have a material adverse impact on the Company’s results of operations for the second quarter of 2018.

First Half 2018 Financial Results

Total revenues for the first six months of 2018 were $31.2 million, compared to the $31.0 million reported in last year’s comparable period. Gross profit was $13.2 million, compared to $13.3 million for the first half of 2017. Net income attributable to Consolidated Water stockholders was$4.3 million ($0.28 per fully diluted share), an increase of 31.5% from the$3.3 million ($0.22 per fully diluted share), earned in the first six months of 2017. Net income and diluted EPS for the first half of 2018 and 2017 included operating expenses of $1.3 million and $1.6 million, respectively, related to development costs for the Rosarito desalination plant.

Summary and Outlook

“Our core desalination business continued its steady performance year-to-date, and the outlook for this business is favorable for volume increases in the Caribbean, particularly in the Cayman Islands, which is experiencing positive tourism industry trends. Additionally, we continue to expect improved year-over-year results from our manufacturing operations for the full 2018 fiscal year.”

“We continue to maintain solid forward momentum with respect to our transformational Rosarito project, which is envisioned as the largest desalination plant in the Western Hemisphere. We remain focused on the negotiation and execution of the debt financing agreements necessary to provide the funding for the first phase of the project. As a reminder, the first phase of the project will supply 50 million gallons of water a day toMexico, with an opportunity to expand the plant capacity in the project’s second phase by an additional 50 million gallons per day.”

“Our company continues to be very well capitalized, providing us with the ability to execute on our growth strategy while simultaneously returning capital to our shareholders in the form of dividends,” Mr. McTaggart concluded.

Investor Conference Call

The Company will host a conference call at 8:30 a.m. Eastern Time (EDT) on Monday, August 13, 2018 to review the Company’s operating results for the second quarter of 2018, along with other relevant topics of interest. Shareholders and other interested parties may participate in the conference call by dialing 844-875-6913 (international participants dial 412-317-6709) and requesting participation in the “Consolidated Water Company Call” a few minutes before 8:30 a.m. EDT onMonday, August 13, 2018.

A replay of the conference call will be available one hour after the call through Monday, August 20, 2018 at 8:30 a.m. EDT by dialing 877-344-7529 (international participants dial 412-317-0088) and entering the conference ID # 10122958.

About Consolidated Water Co. Ltd.

Consolidated Water Co. Ltd. develops and operates seawater desalination plants and water distribution systems in areas of the world where naturally occurring supplies of potable water are scarce. The Company operates water production and/or distribution facilities in the Cayman Islands, Belize, the British Virgin Islands, The Commonwealth of The Bahamas, and Bali, Indonesia. The Company also manufactures and services a wide range of products and provides design, engineering, management, operating and other services applicable to commercial and municipal water production, supply and treatment, and industrial water and wastewater treatment in the United States.

Consolidated Water Co. Ltd. is headquartered in George Town, Grand Cayman, in the Cayman Islands. The Company’s ordinary (common) stock is traded on the NASDAQ Global Select Market under the symbol “CWCO”. Additional information on the Company is available on its website at http://www.cwco.com.

This press release includes statements that may constitute “forward-looking” statements, usually containing the words “believe”, “estimate”, “project”, “intend”, “expect”, “should” 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 relationships with the governments of the jurisdictions in which it operates, the outcome of its negotiations with the Cayman government regarding a new retail license agreement, its ability to successfully secure contracts for new water projects including the project under development in Baja California, Mexico, its ability to develop and operate such projects profitably, its ability to renew existing bulk water supply contracts, its ability to collect its delinquent accounts receivable in the Bahamas, and its ability to manage growth 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 release.

For further information, please contact our investor relations firm, AdvisIRy Partners:
Lynn Morgen: (212) 223-4147 [email protected]
Eric Prouty: (212) 750-5800 [email protected]
Viktoriia Nakhla: (646) 625-4800 [email protected]

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