Consolidated Water(CWCO) - 2025 Q2 - Quarterly Results

Executive Summary Second Quarter 2025 Overview Consolidated Water Co. Ltd. reported a 3% increase in total revenue to $33.6 million for Q2 2025, with net income from continuing operations attributable to stockholders rising 23% to $5.2 million, or $0.32 per diluted share | Metric | Q2 2025 ($) | Q2 2024 ($) | Change (%) | | :------------------------------------------------ | :---------- | :---------- | :--------- | | Total Revenue | $33.6 million | $32.5 million | 3% | | Net Income (Continuing Ops) Attributable to Stockholders | $5.2 million | $4.2 million | 23.8% | | Diluted EPS (Continuing Ops) | $0.32 | $0.26 | 23.1% | | Net Income (Including Discontinued Ops) Attributable to Stockholders | $5.1 million | $15.9 million | -67.9% | | Diluted EPS (Including Discontinued Ops) | $0.32 | $0.99 | -67.7% | - Cash and cash equivalents increased to $112.2 million and working capital increased to $137.4 million as of June 30, 2025[5] - Retail water sold in Grand Cayman increased 7% due to less rainfall, population growth, and increased business activity[5] - The company's client approved pilot test reports and recommendations for the $204 million Hawaii desalination project, a significant milestone paving the way for construction[5][6] Management Commentary CEO Rick McTaggart highlighted strong performance across all four business segments, particularly retail (6% revenue growth) and manufacturing (33% revenue growth), noting the diversified business model's effectiveness and the Hawaii desalination plant project's continued advancement - Retail segment revenue grew 6% and manufacturing segment revenue grew 33% year-over-year[7] - Services segment O&M revenue increased 17%, partially offsetting decreases in construction and design/consulting revenue[7] - Bulk profitability increased in dollar terms and gross profit percentage despite a slight revenue decrease due to lower fuel passthrough charges[7] - Manufacturing segment's gross margin improved by six percentage points, partly driven by water purification equipment for the nuclear power industry, where the company holds NQA-1 certification[9] - The Hawaii desalination plant project achieved a critical milestone with client approval of pilot test reports and recommendations, with construction expected to commence early next year pending permits[10] Second Quarter 2025 Financial Results Consolidated Performance Consolidated revenue for Q2 2025 increased 3% to $33.6 million, driven by growth in retail and manufacturing segments, partially offset by declines in bulk and services, with gross profit improving to $12.8 million (38.2% of revenue) | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | Change (%) | | :-------------------------------- | :---------- | :---------- | :--------- | :--------- | | Total Revenue | $33.6 million | $32.5 million | $1.1 million | 3% | | Gross Profit | $12.8 million | $11.6 million | $1.2 million | 10.3% | | Gross Profit Margin | 38.2% | 35.8% | 2.4 pp | - | | Net Income (Continuing Ops) Attributable to Stockholders | $5.2 million | $4.2 million | $1.0 million | 23.8% | | Diluted EPS (Continuing Ops) | $0.32 | $0.26 | $0.06 | 23.1% | - Net income including discontinued operations decreased significantly from $15.9 million in Q2 2024 to $5.1 million in Q2 2025, primarily due to a $12.1 million gain on sale of a discontinued project in Mexico recognized in the prior year[18] - The company increased its quarterly cash dividend to $0.14 per share for Q3 2025, a 27.3% increase from the Q2 2025 dividend of $0.11 per share[12] Segment Performance Segment-wise, retail revenue increased 6% due to higher volumes, and manufacturing revenue surged 33%, while services revenue decreased 4% primarily from lower construction and design/consulting revenue, though O&M revenue grew 17% | Segment | Q2 2025 Revenue ($) | Q2 2024 Revenue ($) | Change ($) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | :--------- | | Retail | $8,638,026 | $8,181,884 | $456,142 | 5.6% | | Bulk | $8,274,816 | $8,447,958 | -$173,142 | -2.0% | | Services | $11,448,202 | $11,922,469 | -$474,267 | -4.0% | | Manufacturing | $5,230,035 | $3,926,847 | $1,303,188 | 33.2% | - Retail revenue increase was driven by a 7% increase in water sold volume[5][13] - Services segment construction revenue decreased from $4.0 million in Q2 2024 to $2.8 million in Q2 2025, mainly due to the completion of the pilot plant testing phase for the Hawaii project[5][14][34] - Operations and maintenance (O&M) revenue within the services segment increased 17% to $8.3 million[5][15][34] Gross Profit and Net Income Gross profit for Q2 2025 increased to $12.8 million (38.2% of total revenue) from $11.6 million (35.8%) in Q2 2024, primarily due to higher retail and manufacturing revenues and decreased bulk segment cost of revenue, with net income from continuing operations attributable to stockholders rising to $5.2 million, or $0.32 per diluted share | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | Change (%) | | :------------------------------------------------ | :---------- | :---------- | :--------- | :--------- | | Gross Profit | $12,831,985 | $11,620,214 | $1,211,771 | 10.4% | | Gross Profit Margin | 38.2% | 35.8% | 2.4 pp | - | | Net Income (Continuing Ops) Attributable to Stockholders | $5,178,761 | $4,242,411 | $936,350 | 22.1% | | Diluted EPS (Continuing Ops) | $0.32 | $0.26 | $0.06 | 23.1% | - The increase in gross profit was partially offset by a decrease in gross profit for the services segment[16] - Net income including discontinued operations decreased significantly due to a $12.1 million gain on sale of a discontinued project in Mexico recognized in Q2 2024[18] First Half 2025 Financial Results Consolidated Performance For the first half of 2025, total revenue decreased 7% to $67.3 million, primarily due to a significant decline in the services segment, with gross profit slightly decreasing to $25.1 million (37.3% of revenue) from $25.5 million (35.3%) in H1 2024 | Metric | H1 2025 ($) | H1 2024 ($) | Change ($) | Change (%) | | :------------------------------------------------ | :---------- | :---------- | :--------- | :--------- | | Total Revenue | $67.3 million | $72.2 million | -$4.9 million | -6.8% | | Gross Profit | $25.1 million | $25.5 million | -$0.4 million | -1.6% | | Gross Profit Margin | 37.3% | 35.3% | 2.0 pp | - | | Net Income (Continuing Ops) Attributable to Stockholders | $10.1 million | $11.2 million | -$1.1 million | -9.8% | | Diluted EPS (Continuing Ops) | $0.63 | $0.70 | -$0.07 | -10.0% | - Net income including discontinued operations decreased from $22.3 million in H1 2024 to $9.9 million in H1 2025, primarily due to a $12.1 million gain on sale of a discontinued project in Mexico recognized in the prior year[27] Segment Performance First half segment performance showed retail revenue increasing 7% and manufacturing revenue growing 20%, while services revenue significantly decreased by 26.7% due to the completion of two construction projects in H1 2024 and a decline in Hawaii project construction revenue | Segment | H1 2025 Revenue ($) | H1 2024 Revenue ($) | Change ($) | Change (%) | | :---------------- | :-------------- | :-------------- | :--------- | :--------- | | Retail | $18,049,368 | $16,806,822 | $1,242,546 | 7.4% | | Bulk | $16,686,532 | $16,790,052 | -$103,520 | -0.6% | | Services | $21,526,470 | $29,340,080 | -$7,813,610 | -26.6% | | Manufacturing | $11,044,094 | $9,231,594 | $1,812,500 | 19.6% | - Retail revenue increased due to a 10% increase in the volume of water sold[21] - Services segment construction revenue decreased from $13.4 million in H1 2024 to $5.0 million in H1 2025, primarily due to the completion of two projects in H1 2024 and a $2.1 million decline in Hawaii contract revenue[23][34] - Operations and maintenance (O&M) revenue within the services segment increased 13% to $16.0 million[24][34] Gross Profit and Net Income Gross profit for the first half of 2025 was $25.1 million (37.3% of total revenue), a slight decrease from $25.5 million (35.3%) in H1 2024, mainly due to a $2.8 million decline in services segment gross profit, partially offset by increases in retail, bulk, and manufacturing segments | Metric | H1 2025 ($) | H1 2024 ($) | Change ($) | Change (%) | | :------------------------------------------------ | :---------- | :---------- | :--------- | :--------- | | Gross Profit | $25,138,272 | $25,498,237 | -$359,965 | -1.4% | | Gross Profit Margin | 37.3% | 35.3% | 2.0 pp | - | | Net Income (Continuing Ops) Attributable to Stockholders | $10,102,871 | $11,183,825 | -$1,080,954 | -9.7% | | Diluted EPS (Continuing Ops) | $0.63 | $0.70 | -$0.07 | -10.0% | - The decrease in gross profit was primarily due to a $2.8 million decrease in services segment gross profit, resulting from lower construction revenue[25] - Net income including discontinued operations was significantly impacted by a $12.1 million gain on sale of a discontinued project in Mexico in the prior year[27] Financial Position and Supplemental Data Balance Sheet Highlights As of June 30, 2025, Consolidated Water reported a strong financial position with cash and cash equivalents increasing to $112.2 million and working capital at $137.4 million, while total assets grew to $257.5 million and total liabilities increased to $35.3 million, resulting in stockholders' equity of $216.6 million | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | Change (%) | | :-------------------------------- | :-------------- | :---------------- | :--------- | :--------- | | Cash and Cash Equivalents | $112,246,599 | $99,350,121 | $12,896,478 | 13.0% | | Working Capital | $137,417,539 | $132,849,656 | $4,567,883 | 3.4% | | Total Assets | $257,503,568 | $243,313,181 | $14,190,387 | 5.8% | | Total Liabilities | $35,296,128 | $28,003,534 | $7,292,594 | 26.0% | | Total Stockholders' Equity | $216,563,683 | $209,960,695 | $6,602,988 | 3.1% | Revenue Disaggregation by Source The company's revenue is disaggregated into Retail, Bulk, Services, and Manufacturing segments, with Services remaining the largest segment by revenue for Q2 2025, and Manufacturing showing the highest growth rate, while H1 2025 Services revenue saw a significant decline | Revenue Source | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :--------------- | :---------- | :---------- | :---------- | :---------- | | Retail revenue | $8,638,026 | $8,181,884 | $18,049,368 | $16,806,822 | | Bulk revenue | $8,274,816 | $8,447,958 | $16,686,532 | $16,790,052 | | Services revenue | $11,448,202 | $11,922,469 | $21,526,470 | $29,340,080 | | Manufacturing revenue | $5,230,035 | $3,926,847 | $11,044,094 | $9,231,594 | | Total revenue | $33,591,079 | $32,479,158 | $67,306,464 | $72,168,548 | Services Revenue Details Services revenue is further broken down into Construction, Operations and Maintenance (O&M), and Design and Consulting, with Q2 2025 O&M revenue increasing significantly, partially offsetting declines in construction and design/consulting revenue, and H1 2025 construction revenue seeing a substantial decrease | Services Revenue Component | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :------------------------- | :---------- | :---------- | :---------- | :---------- | | Construction revenue | $2,825,935 | $4,004,072 | $5,044,167 | $13,381,536 | | Operations and maintenance revenue | $8,255,408 | $7,068,922 | $15,980,704 | $14,168,275 | | Design and consulting revenue | $366,859 | $849,475 | $501,599 | $1,790,269 | | Total services revenue | $11,448,202 | $11,922,469 | $21,526,470 | $29,340,080 | Condensed Consolidated Financial Statements This section provides the full condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, and the condensed consolidated statements of income for the three and six months ended June 30, 2025, and 2024, offering a comprehensive view of the company's financial health and performance Condensed Consolidated Balance Sheets | ASSETS | June 30, 2025 ($) | December 31, 2024 ($) | | :----------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $112,246,599 | $99,350,121 | | Total current assets | $169,834,888 | $157,788,165 | | Property, plant and equipment, net | $53,746,797 | $52,432,282 | | Total assets | $257,503,568 | $243,313,181 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $32,417,349 | $24,938,509 | | Total liabilities | $35,296,128 | $28,003,534 | | Total Consolidated Water Co. Ltd. stockholders' equity | $216,563,683 | $209,960,695 | | Total equity | $222,207,440 | $215,309,647 | | Total liabilities and equity | $257,503,568 | $243,313,181 | Condensed Consolidated Statements of Income | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :------------------------------------------------ | :---------- | :---------- | :---------- | :---------- | | Revenue | $33,591,079 | $32,479,158 | $67,306,464 | $72,168,548 | | Gross profit | $12,831,985 | $11,620,214 | $25,138,272 | $25,498,237 | | Income from operations | $5,283,764 | $5,010,790 | $9,894,527 | $12,324,784 | | Net income from continuing operations attributable to Consolidated Water Co. Ltd. stockholders | $5,178,761 | $4,242,411 | $10,102,871 | $11,183,825 | | Net income (loss) from discontinued operations | -$82,556 | $11,607,846 | -$215,637 | $11,140,780 | | Net income attributable to Consolidated Water Co. Ltd. stockholders | $5,096,205 | $15,850,257 | $9,887,234 | $22,324,605 | | Diluted earnings per share (Continuing operations) | $0.32 | $0.26 | $0.63 | $0.70 | | Diluted earnings per share (Total) | $0.32 | $0.99 | $0.62 | $1.40 | | Dividends declared per common and redeemable preferred shares | $0.14 | $0.095 | $0.25 | $0.19 | Corporate Information and Disclosures About Consolidated Water Co. Ltd. Consolidated Water Co. Ltd. specializes in developing and operating advanced water supply and treatment plants and distribution systems, including seawater desalination facilities in the Cayman Islands, The Bahamas, and the British Virgin Islands, and water treatment/reuse facilities in the U.S., such as a $204 million project in Hawaii - The company develops and operates advanced water supply and treatment plants and water distribution systems[36] - Operations include seawater desalination in the Cayman Islands, The Bahamas, and the British Virgin Islands, and water treatment/reuse facilities in the United States[36] - Currently undertaking a $204 million design-build-operate project for a seawater desalination plant in Hawaii[36] - Manufactures and services a range of products and provides design, engineering, management, operating, and other services for commercial and municipal water production, supply, treatment, and industrial water/wastewater treatment[37] Conference Call Information Consolidated Water management will host a conference call on Tuesday, August 12, 2025, at 11:00 a.m. Eastern time to discuss the Q2 2025 results, with dial-in and replay information provided for interested parties - Conference call scheduled for Tuesday, August 12, 2025, at 11:00 a.m. Eastern time[35] - Toll-free dial-in: 1-844-875-6913, International dial-in: 1-412-317-6709, Conference ID: 9065693[35] - A replay will be available from 1:00 p.m. Eastern time on the same day through August 19, 2025, via phone (Toll-free: 1-877-344-7529, International: 1-412-317-0088, Replay ID: 9065693) and the company website[36] Cautionary Note Regarding Forward-Looking Statements This section advises that the press release contains forward-looking statements, which inherently involve risks and uncertainties that could cause actual results to differ materially, including factors like market acceptance of products/services, government relationships, and new license agreement negotiations - Statements containing words like "believe", "estimate", "project", "intend", "expect", "should", "will" are forward-looking[39] - Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially[39] - Factors include continued acceptance of products/services, changes in government relationships, outcome of Cayman government retail license negotiations, collection of Bahamas accounts receivable, and other economic/operational risks[39] - More information on risks is available in the company's SEC filings (Form 10-K, 10-Q)[39] Contact Information Contact details are provided for both company inquiries, directed to David W. Sasnett (Executive Vice President and CFO), and investor relations, handled by Ron Both or Grant Stude at Encore Investor Relations - Company Contact: David W. Sasnett, Executive Vice President and CFO, Tel (954) 509-8200[40] - Investor Relations Contact: Ron Both or Grant Stude, Encore Investor Relations, Tel (949) 432-7557[40]