GEORGE TOWN, Cayman Islands, B.W.I., March 28, 2001 — 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, today announced record revenue and earnings for the year 2000.
For the year ended December 31, 2000, net income increased 53% to $2,404,820, or $0.67 per diluted share, compared with net income of $1,569,717, or $0.49 per diluted share, in 1999. Revenue reached a record $10.0 million in 2000, versus $8.2 million in the year ended December 31, 1999. The weighted number of common shares used in the determination of diluted earnings per share increased 13% to 3,616,271, compared with 3,188,048 in 1999, due to the issuance of additional shares in a public stock offering in May 2000.
Net income increased 273% to $285,990, or $0.07 per diluted share, during the three months ended December 31, 2000, compared with net income of $76,692 or $0.03 per diluted share, in the fourth quarter of the prior year. Revenue increased 31% to a record $2,466,687 during the final three months of 2000, versus $1,877,318 in the year-earlier period.
"I am pleased to report that Consolidated Water's revenue exceeded $10 million for the first time in the Company's history during 2000," commented Jeffrey Parker, Chairman and Chief Executive Officer of Consolidated Water Co. Ltd. "At first glance, this may seem a modest milestone to many investors, until one considers that five short years ago our revenue totaled just $5.9 million. Growth in our Cayman market, where revenue increased 16%, returned to historically normal levels in 2000, and we recognized revenue from our recently acquired operations in Belize during the final five months of the year.
"We continued to improve the operating efficiency of the Company, as evidenced by an improvement in net profit margins to a healthy 24.0% of revenue, compared with 19.0% in the previous year. The 53% increase in net income for the year was complemented by a 49% improvement in cash flow from operations, which reached a record $4.0 million, compared with $2.7 million in 1999. Cash flow from operations was equivalent to $1.12 per diluted share in the year 2000, compared with $0.85 per diluted share in 1999."
"The addition of several smaller hotels and the opening of the new Holiday Inn in November played a role in allowing tourist arrivals to Grand Cayman to resume growing at more normal rates during 2000, which in turn generated increased demand for potable water on the island. Construction on the huge Ritz Carlton project is proceeding slowly, but the entire development has recently cleared all planning approvals, and we expect the rate of construction to accelerate in coming months. Condominium and residential development in our Cayman franchise areas continues at a healthy pace, and we are awaiting an announcement of a 'start date' for a very large commercial/residential/marina project under development by the Dart family."
"Our water production operations on Belize were unexpectedly interrupted by the arrival of Hurricane Keith shortly after we acquired the plant last summer," continued Parker. "The facility was back in production, despite no public electricity or telephone service, within 72 hours and, although sales following the storm were curtailed for several weeks as hotels re-opened, we are now achieving considerably higher water deliveries than before the storm. Belize contributed net income of $181,154 in 2000 and generated a healthy 46.2% gross profit margin, despite the hiatus courtesy of Hurricane Keith. This compared with a very respectable 43.4% gross profit margin in our Cayman operations."
"We expect to be delivering potable water to our first customer in the Bahamas around mid-year 2001. Initial deliveries to the condominium/marina development in the Bimini Islands will be at a relatively low level, but should accelerate as various phases of the project are completed.
"We are also in discussions with other developers and with the Government, which has indicated an interest in supplying the local Bimini population with fresh water generated by our desalination plant. Discussions are underway on a number of other potential projects in water-scarce countries. For a variety of reasons, three- to four-year lead times are common on water projects but, since this has been a ongoing process for at least that length of time, we expect to secure one or more of these projects as the year progresses and we move into 2002."
"Our Board of Directors believes that shareholders should receive some tangible benefit from the Company's improving results. We increased our cash dividend by 25% in November 2000, after doubling the cash dividend payout in 1999. Our Board has indicated plans to review the dividend payout on an annual basis," concluded Parker.
Consolidated Water Co. Ltd. intends to develop and operate 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 a reverse osmosis seawater conversion facility on Ambergris Caye off the mainland of Belize, and has signed contracts for an operation in the Commonwealth of the Bahamas.
The common stock of Consolidated Water Co. Ltd. is traded on the Nasdaq National Market under the symbol "CWCO".
