The Market Monitor Minding the Nation's Business
Manila Water posted ₱10.1 billion in net income for the first nine months of 2024, growing by 39% from the same period last year. Tariff adjustments for its East Zone Concession and several of its Non-East Zone Philippines (NEZ PH) businesses continued to provide strong topline support to the robust growth in customer demand.
On a consolidated level, revenues grew by 19% to ₱27.5 billion. The implementation of approved tariff adjustments in the East Zone and in several domestic subsidiaries were further supported by the stable 3% consolidated growth in billed volume. On the other hand, cost of services and expenses for the period was up by 4% at ₱8.8 billion. This was largely in line with the continued addition of new facilities towards service improvement and expansion.
The outpacing of revenues against costs resulted in consolidated EBITDA improving by 26% to ₱19.2 billion, with EBITDA margin moving up 4 percentage points to 70%. Net income margin further strengthened by 6 percentage points to 37%.
At Manila Water’s East Zone Concession, revenues increased by 20% to reach ₱21.8 billion for the period.
The second tranche of the Rate Rebasing tariff adjustment which was implemented early this year was supported by billed volume growth largely driven by the recovery of economic activity in industrial segment customers. Meanwhile, cost and expenses increased by 6% to ₱6.1 billion due to direct and premises costs in line with the addition of new facilities. In all, the East Zone Concession posted net income of ₱9.3 billion, growing by 45% from last year.
Beyond the East Zone Concession, higher contributions from the Laguna, Clark, Boracay and Estate Water businesses under NEZ PH were further supported by 6% total growth in billed volume. This pushed revenues up by 23% to ₱6.5 billion for the period. The strong topline performance improved EBITDA by 36% to ₱3.2 billion, with EBITDA margin improving 5 percentage points to 49%. Consequently, NEZ PH posted net income of ₱908 million, which is an increase of 89% from the same period last year. Net income margin similarly improved by 5 percentage points to 14%. For Manila Water’s overseas businesses under Manila Water International, the lower share in net income of associates was largely due to the lower contributions of the businesses during the period. Specifically, lower revenues and the higher cost of raw water were the main challenges for the investment in East Water in Thailand. For the Vietnam businesses, the higher OPEX of Thu Duc Water and Kenh Dong Water affected business performance. In all, Manila Water International ended the period with a net loss position of ₱19.0 million.
The third quarter saw Manila Water further intensify its implementation of both water and wastewater projects to ensure prudent compliance with regulatory and service commitments. Group CAPEX reached ₱16.7 billion as of September this year, with the East Zone Concession accounting for 90% of total CAPEX for the period at ₱15.1 billion.
Manila Water President and CEO, Jocot de Dios, sees the sustained positive performance as testament to the strong foundation laid by the organization: “When we set out on our path to recovery and growth three years ago, we knew fully well that the road ahead would not be easy. We understood that sacrifices would need to be made at the onset, so that we can establish a robust structure and adopt practices that will result in sustainable efficiencies in our operations, better, more reliable service to our customers, and a more disciplined view of how we pursue growth. I am happy to see that our hard work is now paying off, and even more excited to see what lies ahead.”