Manila Water

Manila Water recorded a net income of 1.2 billion in the first three months of the year, 27 percent lower from the previous year on higher operating expenses, which reflects the impact of the water shortage in the Manila Concession. Manila Water's operating expenses reached 2.46 billion, up 39 percent from a year ago, driven by the provision of financial penalty imposed by the Metropolitan Waterworks and Sewerage System to Manila Water amounting to 534 million for its inability to meet its service obligations to provide 24/7 water supply to its consumers in accordance with the concession agreement. Manila Water's inability to provide its usual 24/7 water supply to some of its consumers stemmed from insufficiency of the water supply from Angat Dam to service the demand of its consumers. This raw water allocation has remained unchanged at 1,600 MLD since the concession started in 1997 when the Manila had a population of only three million people. Today, Manila Water serves a population of almost seven million people whose per capita consumption has significantly increased through over two decades of economic progress in Metro Manila. However, under the concession agreement, the development of new water sources is ultimately the responsibility of MWSS. In collaboration with government, Manila Water continues to implement service recovery efforts, which are now geared towards addressing those residing in the elevated and farthest areas of the concession who are still inconvenienced due to the water supply shortage. The higher operating expenses eclipsed the improvement in revenues registered during the period, expanding 8 percent to 5.08 billion on account of higher tariff in the Manila Concession and improved topline growth of non-Manila Concession businesses which grew 19 percent to 1.1 billion. Revenues was also tempered by the implementation of the voluntary one-time bill waiver program made effective in April as relief to its customers who were affected by the water supply shortage. Net earnings of Manila Water Philippine Ventures, which comprises the company's domestic businesses outside the Manila Concession, climbed 7 percent to 174 million in the first quarter, primarily lifted by revenues from Estate Water, which grew more than twofold to 319 million. Meanwhile, net earnings of Manila Water Asia Pacific, which houses Manila Water's international investments, more than doubled to 135 million led by contribution of East Water in Thailand and its operating subsidiaries in Vietnam.