GEORGE TOWN, Cayman Islands, B.W.I., Nov. 14, 2002 -- Consolidated Water Co. Ltd., which develops and operates seawater conversion plants and water distribution systems in areas where natural supplies of drinking (i.e., potable) water are scarce, Thursday reported its operating results for the third quarter and first nine months of 2002.
For the three months ended September 30, 2002, the Company's water sales increased 7.8% to a third quarter record of approximately $2.9 million, compared with approximately $2.6 million in the year-earlier quarter. Net income declined 6.4% to $604,769, versus net income of $646,253 in the quarter ended September 30, 2001. The Company earned $0.15 per diluted share in the most recent quarter, compared with $0.16 per diluted share in the third quarter of 2001. The weighted average number of diluted shares outstanding totaled 4,095,369 in the third quarter of 2002, versus 4,019,269 average diluted shares outstanding in the prior-year quarter.
For the nine months ended September 30, 2002, water sales rose 8.1% to a record $9.2 million, compared with approximately $8.5 million in the corresponding period of the previous year. The Company reported net income of $2,342,528, or $0.57 per diluted share, in the first nine months of 2002, compared with net income of $2,352,474, or $0.59 per diluted share, in the year-earlier period. The weighted average number of diluted shares outstanding totaled 4,081,489 in the nine months ended September 30, 2002, compared with 4,000,804 average diluted shares outstanding in the first nine months of 2001.
"Water sales in our primary market have been impacted by a 12.5% decline in tourist arrivals to the Cayman Islands during the first nine months of 2002, reflecting air travel concerns and a soft U.S. economy," commented Rick McTaggart, President of Consolidated Water Co. Ltd. "However, the expansion in our customer base that accompanied the February 2002 purchase of the Britannia reverse osmosis water plant allowed us to deliver 10.3% more gallons to Cayman customers than in the first nine months of 2001. In Belize, the number of gallons sold during the nine months ended September 30, 2002, increased 17.2% from the prior-year period, while sales in our newest market, the Bimini Islands (Bahamas) continued to increase as new residential units were completed by our customer.
"Net income for the third quarter of 2002 declined 6.4% from prior-year levels, primarily due to flat water sales to our Cayman customers, other than the new customer base that accompanied the February 2002 purchase of the Britannia reverse osmosis water plant, lower gross profit margins on the Hyatt Hotel and Britannia Golf Course water sales, and the absence of monthly legal settlement fees that we were receiving prior to the purchase of the Britannia plant in February," continued McTaggart.
"In light of macro-economic conditions and the worldwide softness in air travel, we are pleased with Consolidated's operating performance during the first nine months of 2002," noted Jeffrey Parker, Chairman and Chief Executive Officer of Consolidated Water Co. Ltd. "We remain cautiously optimistic that full year earnings may increase modestly and establish a new record for the Company. Our net profit margin approximated 25.5% of revenues in the first three quarters of 2002, and we expect to achieve a net return on beginning shareholders' equity exceeding 16% for the year ending December 31, 2002.
"As we have noted in prior news releases, we continue to believe that Consolidated Water can 'export' its operating expertise in water desalination to a number of other countries in the Caribbean and in other parts of the world where naturally occurring supplies of potable water are scarce. Shortly after the end of the third quarter, we announced the signing of agreements to acquire interests in several companies that will expand our water operations into the British Virgin Islands and Barbados and increase our presence in the Cayman Islands and the Commonwealth of the Bahamas. The successful completion of these transactions will increase Consolidated's water production capacity by over 275% and our annualized revenues by approximately 85%. We would expect the combined acquisitions to be accretive to earnings per share immediately."
Consolidated Water Co. Ltd. has paid cash dividends consistently since 1985. A quarterly cash dividend of $0.105 per share was paid on October 31, 2002 in respect of the quarter ended September 30, 2002, and the Company's Board has declared a similar dividend, payable January 31, 2003, in respect of the quarter ending December 31, 2002. This is equivalent to an annualized cash dividend rate of $0.42 per share.
The Company will host an investor conference call at 4:15 p.m. EST today, November 14, 2002, to discuss its operating results. To participate in the conference call, please dial 800-388-8975, or 973-694-2225 for international callers, a few minutes before 4:15 p.m. EST. A replay of the conference call will be available until November 21, 2002, by dialing 800-428-6051 or 973-709-2089 for international callers. The Access Code is 267818 for the replay.
Consolidated Water Co. Ltd. is engaged in the development and operation of seawater conversion plants and water distribution systems in areas of the world where naturally occurring supplies of potable water are scarce or nonexistent. It currently operates a public water utility in certain areas of the Cayman Islands under a 20-year exclusive license from the Government of the Cayman Islands. The Company also operates reverse osmosis seawater conversion facilities on Ambergris Caye off the mainland of Belize, and in the Commonwealth of the Bahamas.
