Making Waves: Manila Water's Splashing Success in 2024

COURTESY: Manila Water

Manila Water has been making quite the splash in 2024, posting a net income of ₱10.1 billion for the first nine months—a whopping 39% increase from the same period last year! This financial surge is not just a stroke of luck but a result of strategic tariff adjustments in its East Zone Concession and several Non-East Zone Philippines (NEZ PH) businesses. These adjustments have provided robust topline support, fueling the increasing customer demand.

Diving deeper into the numbers, Manila Water's consolidated revenues grew by 19% to reach ₱27.5 billion. This impressive growth was buoyed by the implementation of approved tariff adjustments and a stable 3% growth in billed volume. Meanwhile, the cost of services and expenses nudged up by a modest 4%, hitting ₱8.8 billion. This rise aligns with the company’s ongoing efforts to enhance service and expand its facilities. With revenues outpacing costs, the company's consolidated EBITDA surged by 26% to ₱19.2 billion, improving the EBITDA margin by 4 percentage points to a stellar 70%.

In the East Zone Concession, Manila Water has been riding high on a wave of success. Revenues for this segment soared by 20%, reaching a remarkable ₱21.8 billion. This growth was largely driven by the second tranche of the Rate Rebasing tariff adjustment and the recovery of economic activity in industrial segment customers. The company’s ability to adapt and leverage these opportunities has been instrumental in this financial upswing.

Even though costs and expenses increased by 6% to ₱6.1 billion, largely due to direct and premises costs associated with new facilities, the East Zone Concession managed to post a net income of ₱9.3 billion. This marks a significant 45% growth from the previous year, showcasing Manila Water's adeptness at balancing growth with operational efficiency.

Beyond the East Zone, Manila Water's Non-East Zone Philippines (NEZ PH) businesses have also been making waves. Contributions from Laguna, Clark, Boracay, and Estate Water businesses helped push revenues up by 23% to ₱6.5 billion. A 6% total growth in billed volume further buoyed this segment, leading to a 36% improvement in EBITDA, which reached ₱3.2 billion.

The EBITDA margin also saw a boost, improving by 5 percentage points to 49%. Consequently, NEZ PH posted a net income of ₱908 million, an impressive 89% increase compared to last year. This solid performance highlights the strategic importance of diversifying revenue streams and enhancing operational efficiencies across different regions.

While Manila Water's domestic operations are sailing smoothly, its international endeavors have faced some choppy waters. Manila Water International ended the period with a net loss of ₱19.0 million, primarily due to lower revenues and higher raw water costs in Thailand, as well as increased operational expenses in Vietnam.

Nevertheless, Manila Water remains undeterred. The company has intensified its efforts to implement both water and wastewater projects to meet regulatory and service commitments. With a group CAPEX reaching ₱16.7 billion as of September, the company is poised to continue its expansion and service improvement initiatives.

Manila Water President and CEO, Jocot de Dios, expressed optimism about the future, stating, “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.”

In conclusion, Manila Water's remarkable financial performance in 2024 underscores the strength of its strategic initiatives and its commitment to growth and service excellence. As the company continues to navigate both opportunities and challenges, one thing is clear: Manila Water is making waves, and its future looks bright.