GEORGE TOWN, Cayman Islands, Aug. 14, 2024 (GLOBE NEWSWIRE) -- Consolidated Water Co. Ltd. (NASDAQ Global Select Market: CWCO), a leading designer, builder and operator of advanced water supply and treatment plants, reported results for the second quarter ended June 30, 2024. All comparisons are to the same prior year period unless otherwise noted. Consolidated Water will hold a conference call at 11:00 a.m. Eastern time tomorrow to discuss the results (see dial-in information below). Second Quarter 2024 Financial Key Points Total revenue declined 27% to $32.5 million. Retail revenue increased 8% to $8.2 million on higher sales volumes. Bulk revenue was relatively consistent at $8.4 million. Manufacturing revenue was relatively consistent at $3.9 million. Services revenue declined by 51% (or approximately $12.2 million) to $11.9 million due to a $16.5 million decline in construction revenue that was partially offset by an approximately $3 million increase in recurring operations and maintenance revenue. Net income from continuing operations attributable to company stockholders totaled $4.2 million or $0.26 per diluted share, compared to $7.5 million or $0.47 per diluted share in the second quarter of 2023. Net income including discontinued operations attributable to company stockholders totaled $15.9 million or $0.99 per diluted share, compared to $7.3 million or $0.46 per diluted share in the second quarter of 2023. Cash and cash equivalents totaled $96.7 million and working capital was $131.2 million as of June 30, 2024. Second Quarter 2024 Operational Key Points Volume of retail water sold in the company's utility service area in Grand Cayman increased 10% compared with the same period in 2023. Completed the construction and commissioning of the new 2.6 million gallon per day Red Gate desalination plant for the Water Authority of the Cayman Islands. Began operating the facility under a 10-year operations and maintenance agreement. Continued piloting, design and permitting of a $147 million project to design, construct, operate and maintain a seawater desalination plant for the Board of Water Supply of Honolulu, Hawaii. Recognized $1.9 million in operations and maintenance revenue from REC which Consolidated Water acquired in October 2023 to provide a new channel for expansion in water-stressed regions of Colorado. Settled a dispute with Mexico involving the discontinued desalination project in Playas de Rosarito, Mexico and recognized a gain of $12.1 million from the sale of the project land and project documentation. Received Notice to Proceed under a new 15-year agreement with the Water and Sewerage Corporation of the Bahamas to design, build, own, operate and finance two seawater desalination plants on Cat Island in the Bahamas. Management Commentary "Our second quarter results were fairly positive, especially considering the inherent variability in our service segment revenue and earnings due to the timing of our large design-build projects in Grand Cayman, Arizona and Hawaii," stated company CEO, Rick McTaggart. "Our services revenue was down by about half due to the anticipated reduction in construction-related revenue as the Grand Cayman and Arizona projects were completed earlier this year. "Meanwhile, development activities continue to ramp up on the $147 million project to design, construct, operate and maintain a seawater desalination plant for the Board of Water Supply of Honolulu in Hawaii that we announced in June of last year. We are currently in the piloting, design and permitting stage, which we expect will lead into the full construction stage late next year. "The completion of the Hawaii project plant encompasses the current two-year development phase followed by a two-year construction phase. After construction and commissioning, we will operate the plant under a 20-year operations and maintenance agreement which has two additional 5-year extensions exercisable at the client's discretion. "The reduction in construction-related revenue in the second quarter was partially offset by an increase in the revenue generated from operations and maintenance contracts by both PERC and REC. We acquired REC last October to provide a new channel for growth in the water-stressed regions of Colorado, and we've been pleased with REC's integration into our company and the new opportunities we see developing in Colorado. Similar to our acquisition of PERC, we anticipate that our greater financial and management resources will enable REC to pursue larger projects that will accelerate REC's growth over time. "Looking ahead to the remainder of the year and beyond, we remain very excited about our prospects. Many positive factors—including the consistent strong water sales growth in Grand Cayman, the long-term recurring revenues from our Caribbean-based bulk water and U.S.-based O&M businesses, stabilized manufacturing revenue and earnings, and the anticipated revenue and earnings from our $147 million design-build-operate project in Hawaii—altogether provide a very solid base for the company in the coming years. "Supported by our exceptionally strong balance sheet, we will continue to invest in new long-term projects such as two desalination plants on Cat Island in the Bahamas, as well as new infrastructure to serve the growing water needs of our utility customer in the Cayman Islands. We see these projects ultimately enhancing revenue growth. "The market for design-build projects is also showing no sign of slowing. While we are currently in a period between two large projects, we believe our efficient and aesthetically pleasing plant designs, our cost-efficient project delivery models and our significant industry experience will help us secure new projects. "In fact, we recently signed master design-build service agreements with two major national clients for a number of projects they are contemplating. We anticipate this will positively impact revenue and earnings in future periods. Combined with strong industry tailwinds, we anticipate that all of these factors will drive our long-term growth, enhance profitability, and further strengthen shareholder value." Second Quarter 2024 Financial Summary Revenue totaled $32.5 million, declining 27% from $44.2 million in the second quarter of 2023. The decrease was primarily due to decreases of $35,000 in the bulk segment, $12.2 million in the services segment and $161,000 in the manufacturing segment. The decreases were partially offset by an increase of $609,000 in the retail segment. Retail revenue increased primarily due to a 10% increase in the volume of water sold. The volume of water sold increased due to a 5.5% increase in the number of customer accounts in the company's license area from June 30, 2023 to June 30, 2024. The increase was also due to significantly less rainfall on Grand Cayman in April and May of 2024 as compared to the same months a year ago. The marginal decrease in bulk segment revenue was due to lower energy costs, which decreased the energy pass-through component of the company's bulk water rates. The decrease in services segment revenue was primarily due to plant construction revenue decreasing from $19.8 million in 2023 to $3.3 million in 2024 as the result of two construction projects nearing completion during the quarter. Revenue generated under operations and maintenance contracts totaled $7.1 million in the second quarter of 2024, an increase of 75% from the second quarter of 2023. Newly acquired REC contributed $1.9 million of the increase, with the remainder related to PERC contracts. Manufacturing segment revenue was relatively consistent at $3.9 million as compared to $4.1 million in the second quarter of 2023. Gross profit for the second quarter of 2024 was $11.6 million (36% of total revenue), as compared to $15.5 million (35% of total revenue) in the second quarter of 2023. Net income from continuing operations attributable to Consolidated Water stockholders for the second quarter of 2024 was $4.2 million or $0.26 per diluted share, compared to net income of $7.5 million or $0.47 per diluted share in the second quarter of 2023. Including discontinued operations, net income attributable to Consolidated Water stockholders for the second quarter of 2024 was $15.9 million or $0.99 per diluted share, up from net income of $7.3 million or $0.46 per diluted share in the second quarter of 2023. The increase was primarily due to the gain on sale of the land and documentation related to a discontinued project in Mexico totaling $12.1 million in the second quarter of 2024. Cash and cash equivalents totaled $96.7 million as of June 30, 2024, with working capital of $131.2 million, debt of $0.3 million, and stockholders' equity of $206.7 million. First Half 2024 Financial Summary Revenue for the first half of 2024 was $72.2 million, down 6% compared to $77.1 million in the same year-ago period. The decrease was primarily driven by decreases of $0.7 million in the bulk segment and $7.5 million in the services segment. The decreases were partially offset by increases of $1.5 million in the retail segment and $1.8 million in the manufacturing segment. Retail revenue increased primarily due to an 8% increase in the volume of water sold. The volume of water sold increased due to a 5.5% increase in the number of customer accounts in the company's license area from June 30, 2023 to June 30, 2024. The retail revenue increased also as a result of significantly less rainfall on Grand Cayman in April and May of 2024 as compared to the same months a year ago. The decrease in bulk segment revenue was due to a decrease in energy costs for CW-Bahamas, which decreased the energy pass-through component of CW-Bahamas' rates. The decrease in services segment revenue was due to a $16.5 million decrease in plant construction revenue. Revenue generated under operations and maintenance contracts totaled $14.2 million in the first half of 2024, up 83% as compared to $7.7 million in the same year-ago period. The increase in manufacturing segment revenue was due to increased production activity. Gross profit for the first half of 2024 was $25.5 million (35% of total revenue), down 2% from $26.0 million (34% of total revenue) in the same year-ago period. Net income from continuing operations attributable to stockholders for the first half of 2024 was $11.2 million or $0.70 per diluted share, compared to net income of $11.6 million or $0.73 per diluted share for the first half of 2023. Including discontinued operations, net income attributable to Consolidated Water stockholders for the first half of 2024 was $22.3 million or $1.40 per fully diluted share, up from net income of $11.1 million or $0.70 per fully diluted share in the same period of 2023. The increase was primarily due to a gain on sale of land and project documentation of $12.1 million in the second quarter of 2024. Second Quarter Segment Results     Three Months Ended June 30, 2024     Retail   Bulk   Services   Manufacturing   Total Revenue   $ 8,181,884     $ 8,447,958     $ 11,922,469     $ 3,926,847     $ 32,479,158   Cost of revenue     3,670,133       6,097,460       8,458,537       2,632,814       20,858,944   Gross profit     4,511,751       2,350,498       3,463,932       1,294,033       11,620,214   General and administrative expenses     4,378,816       363,268       1,196,624       667,586       6,606,294   Gain (loss) on asset dispositions and impairments, net     (6,130 )     —       3,000       —       (3,130 ) Income from operations   $ 126,805     $ 1,987,230     $ 2,270,308     $ 626,447       5,010,790   Other income, net                                   418,426   Income before income taxes                                   5,429,216   Provision for income taxes                                   1,063,933   Net income from continuing operations                                   4,365,283   Income from continuing operations attributable to non-controlling interests                                   122,872   Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders                                   4,242,411   Net income from discontinued operations                                   11,607,846   Net income attributable to Consolidated Water Co. Ltd. stockholders                                 $ 15,850,257       Three Months Ended June 30, 2023     Retail   Bulk   Services   Manufacturing   Total Revenue   $ 7,573,329     $ 8,482,495     $ 24,093,963     $ 4,087,476     $ 44,237,263   Cost of revenue     3,433,132       5,931,735       16,248,141       3,160,706       28,773,714   Gross profit     4,140,197       2,550,760       7,845,822       926,770       15,463,549   General and administrative expenses     4,265,535       379,900       904,560       434,920       5,984,915   Gain on asset dispositions and impairments, net     —       1,000       —       —       1,000   Income from operations   $ (125,338 )   $ 2,171,860     $ 6,941,262     $ 491,850       9,479,634   Other income, net                                   129,131   Income before income taxes                                   9,608,765   Provision for income taxes                                   1,940,067   Net income from continuing operations                                   7,668,698   Income attributable to non-controlling interests                                   137,226   Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders                                   7,531,472   Net loss from ...