GEORGE TOWN, Cayman Islands, Aug. 04, 2025 (GLOBE NEWSWIRE) -- Consolidated Water Co. Ltd. (NASDAQ Global Select Market: CWCO), a leading designer, builder and operator of advanced water supply and treatment plants, will hold a conference call on Tuesday, August 12, 2025 at 11:00 a.m. Eastern time to discuss its results for the second quarter ended June 30, 2025. The financial results will be issued in a press release prior to the call. Consolidated Water management will host the call, followed by a questio ...

Core Viewpoint - Consolidated Water Co. Ltd. (CWCO) is leveraging advanced technology for seawater desalination to meet potable water demands, enhancing its operational performance despite facing challenges related to accounts receivable and weather fluctuations [1][8]. Group 1: Company Operations and Technology - CWCO utilizes Reverse Osmosis Technology at all its water treatment plants, which is crucial for converting seawater to potable water, positioning the company favorably in the desalination market [2][8]. - The company operates 10 desalination plants with a total capacity of 26.2 million gallons per day across four countries, and is actively seeking new market opportunities to expand its drinking water and wastewater services [3][8]. - CWCO aims to grow its operations in complementary service industries through independent ventures or partnerships, targeting advanced water-treatment businesses under medium to long-term contracts with government entities [4][8]. Group 2: Financial Challenges - The Bahamas subsidiary of CWCO is experiencing significant delays in collecting accounts receivable, with balances of $25.5 million and $28.4 million as of March 31, 2025, and December 31, 2024, respectively, with approximately 78% and 81% of these balances being delinquent [5][8]. - Fluctuations in demand for water services are influenced by weather conditions and tourism levels, which could negatively impact the company's operational results and cash flows [6][8]. Group 3: Stock Performance - Over the past three months, CWCO's stock has returned 26.8%, contrasting with a 0.3% decline in the industry, indicating strong market performance [7][8].

Group 1 - The strong buy thesis on Consolidated Water Co. Ltd. (NASDAQ: CWCO) is based on its well-diversified revenue portfolio within the Water Solutions specialization, indicating recurring revenue streams [1] - The company operates primarily in the utilities sector, focusing on water solutions, which positions it favorably in the market [1] - The investment research approach emphasizes a mix of fundamental analysis, discounted cash flow models, multiples, and dividends, while also considering broader market conditions [1] Group 2 - The analyst has a background in accounting and has completed CFA Level 1, providing a solid foundation for equity research [1] - The coverage spans various sectors including utilities, consumer discretionary, consumer staples, REITs, and materials, with a focus on equities across the Americas [1] - The investment perspective is primarily mid-term, targeting a return horizon of 1 to 3 years [1]

Company Overview - Consolidated Water (CWCO) shares have increased by approximately 14.1% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the catalysts affecting the stock [1] Earnings Estimates - Fresh estimates for Consolidated Water have trended downward, with the consensus estimate decreasing by 12.86% [2] - The stock has a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [4] VGM Scores - Consolidated Water has a subpar Growth Score of D and a Momentum Score of C, with an overall aggregate VGM Score of F, placing it in the bottom 40% for investment strategies [3] Industry Performance - Consolidated Water is part of the Zacks Utility - Water Supply industry, where American States Water (AWR) has gained 3.4% over the past month [5] - American States Water reported revenues of $148.01 million for the last quarter, reflecting a year-over-year increase of 9.4% [5] - The expected earnings for American States Water for the current quarter is $0.92 per share, representing a year-over-year change of 8.2% [6]

Group 1 - The stock of Consolidated Water Co. Ltd. (CWCO) is experiencing significant attention due to high implied volatility in the options market, particularly the Aug 15, 2025 $22.50 Put option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in the stock's price, potentially due to an upcoming event [2] - Analysts have a cautious outlook on Consolidated Water, with no increases in earnings estimates over the last 60 days and a decrease in the Zacks Consensus Estimate from 24 cents to 20 cents per share [3] Group 2 - The high implied volatility may indicate a trading opportunity, as options traders often seek to sell premium on options with elevated implied volatility, aiming to benefit from time decay [4]

Core Insights - Consolidated Water Co. Ltd. (CWCO) has approved a 47.4% year-over-year increase in its quarterly dividend rate to 14 cents per share, payable on July 31, 2025 [1][9] - The new annualized dividend rate is 56 cents per share, with a current dividend yield of 2.26%, outperforming the S&P 500 average of 1.57% [2] - The company's strong financial performance across its segments has led to increased cash flow, enabling the dividend hike [3] Financial Performance - CWCO has raised its dividend three times in the last five years, with an annualized dividend growth rate of 4.74% [2] - The company has experienced stable performance in its retail, bulk, and manufacturing segments, contributing to the dividend increase [9] Growth Opportunities - Consolidated Water operates 10 desalination plants with a capacity of 26.2 million gallons per day and is exploring new markets for expansion [4] - A $204 million design-build-operate project in Hawaii is underway, expected to drive revenue growth in the Services segment in 2026 and 2027 [4][9] - The company aims to expand into complementary service industries through joint ventures, strategic alliances, and acquisitions [5] Market Outlook - The U.S. desalination market is projected to reach $2.6 billion by 2028, growing at a CAGR of 8.3%, which aligns with CWCO's focus on desalination [6] - The company is positioned to benefit from rising demand for low-cost installation and advanced membrane technology for water treatment [6] Industry Context - Domestic-focused, rate-regulated water utilities are stable performers, allowing for dividend hikes and share buybacks [8] - Other water utilities have also raised their dividend rates in 2025, indicating a positive trend in the industry [8][10] Stock Performance - CWCO's shares have increased by 17.6% in the past month, contrasting with a 2.7% decline in its industry [11]

Core Points - Consolidated Water Co. Ltd. has increased its quarterly cash dividend to $0.14 per share for Q3 2025, marking a 27.3% increase from the previous quarter's dividend of $0.11 per share [1][2] - The dividend is payable on July 31, 2025, to shareholders of record as of July 1, 2025 [2] - The company's positive financial performance across its retail, bulk, and manufacturing segments has contributed to increased cash flows and liquidity, prompting the board's decision to raise the dividend [3] - Consolidated Water reported revenue of $33.7 million and earnings per share of $0.30 in Q1 2025 [3] Company Overview - Consolidated Water Co. Ltd. specializes in the development and operation of advanced water supply and treatment plants, including seawater desalination facilities in the Cayman Islands, The Bahamas, and the British Virgin Islands [4] - The company is also engaged in designing, constructing, and operating water treatment and reuse facilities in the United States, with a notable $204 million project for a seawater desalination plant in Hawaii currently underway [4] - Additionally, the company manufactures and services a variety of products and provides design, engineering, management, and operational services related to commercial and municipal water production, supply, and treatment [5]

Core Insights - Consolidated Water Co. Ltd. (CWCO) reported first-quarter 2025 earnings per share (EPS) of 31 cents, exceeding the Zacks Consensus Estimate of 22 cents by 40.9%, although this represents a 27.9% decrease from the previous year's EPS of 43 cents [1] - The market reacted positively to the earnings report, with CWCO shares increasing by 5.43% following the announcement [1] Revenue Performance - Total revenues for the first quarter of 2025 were $33.7 million, surpassing the Zacks Consensus Estimate of $32 million by 4.2%, but down 15% year-over-year due to a decline in services revenues following the completion of two large construction projects [2] - Retail revenues increased by 9% to $9.4 million, driven by higher sales volumes [2] - Bulk revenues rose by 1% to $8.4 million, while manufacturing revenues increased by 10% to $5.8 million [3] - Services revenues saw a significant decline of 42% to $10.1 million, attributed to decreases in construction revenues by $7 million and design and consulting revenues by $980,000 [3] Profitability Metrics - Gross profit for the first quarter of 2025 was $12.3 million, down from $13.9 million in the same quarter of 2024, primarily due to a $2.7 million decrease in the service segment's gross profit [4] - Retail water sales in Grand Cayman increased by 13%, supported by population growth and increased business activity in the service area [4] Financial Position - As of March 31, 2025, cash and cash equivalents totaled $107.9 million, up from $99.4 million at the end of 2024, with working capital at $136.2 million [6] - Total long-term debt was minimal at $0.06 million, down from $0.07 million at the end of 2024 [6] - Cash flow from operating activities for the first quarter of 2025 was $11.8 million, compared to $5.9 million in the prior year [6] Strategic Developments - CWCO received a new concession from the Cayman Islands government, granting exclusive rights to produce and supply potable water in its service area [5] - On May 13, 2025, CWCO's subsidiary, Kalaeloa Desalco LLC, received approval for a $204 million multi-year project, which is expected to align with current water supply needs without negatively impacting existing infrastructure [8]

Financial Data and Key Metrics Changes - Revenue decreased by 15% year-over-year to $33.7 million, primarily due to a $7.3 million decline in the services segment related to completed construction projects [10][12] - Net income from continuing operations attributable to shareholders was $4.9 million or $0.31 per diluted share, down from $6.9 million or $0.43 per diluted share in the same period last year [13] - Gross profit for the first quarter was $12.3 million, approximately 37% of total revenue, compared to $13.9 million or around 35% in the prior year [12][13] Business Segment Data and Key Metrics Changes - Services segment revenue declined significantly due to the completion of major design-build projects, partially offset by a 9% increase in recurring revenue from operations and maintenance contracts [4][5] - Retail segment revenue increased by $786,000, driven by a 13% rise in water sales volume [11] - Manufacturing segment revenue rose by $509,000 to $5.8 million, reflecting improved production activity and a higher margin product mix [12][19] Market Data and Key Metrics Changes - Retail water sales in Grand Cayman saw much higher volumes due to population growth and increased business activity [4] - The Caribbean-based Bulk Water segment revenue remained stable year-over-year, indicating the long-term stable income-generating nature of these operations [4] Company Strategy and Development Direction - The company is focusing on expanding its services in Hawaii, with a significant seawater desalination project expected to be a major growth driver for the services segment in 2026 and 2027 [6][20] - The company is pursuing additional projects in the Western U.S. and exploring opportunities in wastewater treatment, particularly in Arizona and the Southern Caribbean [21][22] - The management is evaluating how to best utilize the large cash balance to increase shareholder value, including potentially increasing quarterly dividends [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver steady long-term growth in revenue and profit, driven by strong retail water sales growth, stability in bulk water operations, and ongoing design-build projects [23] - The company anticipates a decline in design-build work in 2025 compared to previous years but expects improvement in the second half of the year as smaller projects commence [21][23] Other Important Information - The company received a new concession from the Cayman Islands government, granting exclusive rights to produce and supply potable water in its service area [16][17] - The expansion of the West Bay seawater desalination plant is underway to meet growing demand, with plans for additional water storage tanks [18] Q&A Session Summary Question: Construction revenue flow for Hawaii project - Management explained that the construction revenue will ramp up as costs are incurred, with a significant portion of revenue expected to be recognized during the construction phase [26][32] Question: Retail segment growth sustainability - Management confirmed that the increase in retail water sales is rooted in permanent population growth and business activity, not just seasonal variations [44][48] Question: Permitting responsibilities for Hawaii project - Management clarified that permitting responsibilities are shared between the company and the client, with some permits taking longer than expected due to government agency processes [60][64] Question: Future opportunities in Asia Pacific - Management indicated that there are no current plans to pursue projects in the Asia Pacific region, focusing instead on opportunities closer to home, particularly in Florida [71][72]

Financial Data and Key Metrics Changes - Revenue decreased by 15% year-over-year to $33.7 million, primarily due to a $7.3 million decline in the services segment related to completed construction projects [7][10] - Net income from continuing operations attributable to shareholders was $4.9 million or $0.31 per diluted share, down from $6.9 million or $0.43 per diluted share in the same quarter last year [10] - Cash and cash equivalents increased to $107.9 million, with working capital rising to $436.2 million [11] Business Segment Data and Key Metrics Changes - Services segment revenue declined significantly due to the completion of major design-build projects, partially offset by a 9% increase in recurring revenue from operations and maintenance contracts [3][4] - Retail segment revenue increased by $786,000, driven by a 13% rise in water sales volume [8] - Manufacturing segment revenue rose by approximately 10% to $5.8 million, reflecting improved production activity and a higher margin product mix [9][15] Market Data and Key Metrics Changes - Retail water sales in Grand Cayman showed much higher volumes due to population growth and increased business activity [3] - The Caribbean-based Bulk Water segment revenue remained stable year-over-year, indicating consistent income generation [3] Company Strategy and Development Direction - The company is focused on expanding its services in Hawaii, with a significant seawater desalination project expected to drive growth in the services segment in 2026 and 2027 [5][6] - The company is pursuing additional projects in Colorado and the Southern Caribbean, indicating a strategy to diversify its geographical presence and service offerings [17][19] - Management emphasized the importance of long-term recurring revenue from Caribbean bulk water operations and retail water sales growth as key drivers for future profitability [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a decline in design-build work for 2025 but expects improvement in the second half of the year with several smaller projects set to begin construction [18] - The company remains confident in delivering steady long-term growth in revenue and profit, supported by strong retail water sales and ongoing projects [20] Other Important Information - The company is evaluating how to best utilize its large cash balance to increase shareholder value, including the potential for increasing quarterly dividends [12] - The company has resumed discussions with the utility regulator in the Cayman Islands for a new operating license, which is crucial for future operations [13][14] Q&A Session Summary Question: Construction revenue flow for Hawaii project - Management explained that the construction revenue will ramp up as costs are incurred, with a significant portion of the revenue recognized during the construction phase [21][24] Question: Retail segment growth sustainability - Management confirmed that the increase in retail water sales is driven by permanent population growth and business activity, not just seasonal variations [30][32] Question: Permitting responsibilities for the Hawaii project - Management clarified that permitting responsibilities are shared between the company and the client, with some permits taking longer than expected due to government agency processes [39][44] Question: Future opportunities in Asia Pacific - Management indicated that while there are no current pursuits in the Asia Pacific region, there are sufficient opportunities closer to home, particularly in Florida [47][48]