The following is a summary of the Consolidated Water Co. Ltd. (CWCO) Q2 2024 Earnings Call Transcript:
Financial Performance:
Q2 2024 revenue dropped 27% to $32.5 million due to decreased construction revenue.
Net income from continuing operations fell to $4.2 million, or $0.26 per share.
Business Progress:
Completed $81 million water treatment plant in Goodyear, Arizona.
Acquired REC, adding $1.9 million to revenue, expanding presence in Colorado.
Opportunity:
Retail segment revenue grew 8% to $8.2 million in Grand Cayman.
Long-term contracts for desalination plants ensure stable revenue streams.
Risk:
Timing of design-build projects causes revenue variability in Services segment.
Contract cancellation with Mexico government poses geopolitical risks.
Financial Performance:
Consolidated Water Co. Ltd. reported Q2 2024 revenue of $32.5 million, a 27% decrease from the previous year, primarily due to a drop in construction revenue.
Net income from continuing operations was $4.2 million, or $0.26 per diluted share, down from $7.5 million or $0.47 per share last year.
Including discontinued operations, net income was $15.9 million, or $0.99 per diluted share, versus $7.3 million, or $0.46 per share, year-over-year.
High liquidity with cash and equivalents of $96.7 million as of June 30, 2024, boosted by a settlement from the Mexico government.
Business Progress:
Completed the $81 million water treatment plant in Goodyear, Arizona.
Completed the new 2.6 million gallon per day Red Gate desalination plant in Grand Cayman.
Revenue from operations and maintenance contracts increased by 75% to $7.1 million.
Acquired REC to expand in Colorado's water-stressed regions, contributing $1.9 million to revenue.
Development activities continue for the $147 million desalination plant project in Honolulu, Hawaii.
Received a 15-year agreement to design, build, and operate two desalination plants in the Bahamas.
Opportunities:
The growth in the retail segment revenue by 8% to $8.2 million due to increased water demand in Grand Cayman reflects potential for further expansion.
Long-term operations and maintenance contracts for new and existing desalination plants provide stable revenue streams.
The Hawaii project and upcoming projects in the Bahamas signify potential for major revenue from large-scale water infrastructure projects.
Expansion of operations in water-stressed regions like Colorado and potential industrial markets for water treatment equipment present new growth avenues.
Risks:
Revenue variability in the Services segment due to the timing of large design-build projects could impact consistent revenue streams.
The Mexico government contract cancellation, although settled, highlights geopolitical and contractual risks in international projects.
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