Manila Water's Nine-Month Profit Dips 5% Amid Rising Costs

Nine-Month Earnings Decline

Manila Water Co. Inc. announced a 5% decline in its net income for the first nine months of the year, reporting P11.995 billion. This figure represents a decrease from the P12.67 billion recorded during the same period last year. Despite the profit reduction, the utility's revenues saw a significant 30% increase, rising to P33.4 billion from P30.05 billion in the prior year.

Manila Water attributed this revenue growth primarily to higher average tariffs and an increase in billed volumes across its operations.

Cost Pressures on Profitability

The reduction in net income was largely driven by escalating operational costs. Manila Water's net interest expense more than doubled, reaching P4.67 billion compared to P2.3 billion in the previous year. Concurrently, amortisation and depreciation costs climbed by 26%, totalling P4.92 billion, up from P3.91 billion a year ago.

These increased expenses offset the strong revenue performance, directly impacting the company's overall profitability for the period.

Operational Performance and Segment Growth

Approximately 73% of Manila Water's operating revenues were derived from water sales, with environmental and sewer charges contributing the remaining 22%. Total billed volumes for the nine-month period reached 663.11 million cubic metres, serving 1,425,174 connections.

Revenues from the East Zone concession, which includes WawaJV Co, increased by 12% to P26.9 billion, supported by a P67.2 per cubic metre rate rebasing adjustment in January.

Non-East Zone businesses also saw a 6% revenue rise to P7.4 billion, driven by tariff adjustments, higher billed volumes in regions like Clark, South Luzon, and Boracay, alongside increased supervision fees from Laguna Water and Estate Water projects.

Capital Expenditure and Strategic Financing

Manila Water invested P11.7 billion in capital expenditure during the period, partly in preparation for potential El Niño impacts on water supply. To support its ongoing capital spending, the company's board approved a P10 billion loan facility from Land Bank of the Philippines.

This loan, with a term of up to 10 years, will partially finance East Zone capital expenditure and general corporate requirements. Manila Water President and CEO Roberto Locsin stated that these investments aim to strengthen the business, expand water sources, and improve system reliability for long-term value creation.