WWL: ‘Strongest Year Since Onset Of Recession’

May 10, 2016

In a filing with the Bermuda Stock Exchange, Watlington Waterworks Ltd. released the annual financial results to 31 December, 2015 along with the Directors’ Report.

The Directors’ Report stated,” The Company is pleased to report that the year 2015 was the Company’s strongest year since the onset of the recession. Water sales improvements were due to increases in both bottled water sales and piped water sales.

“The Utility Division did have a decrease in customers last year, despite expansion in the West End because of a cull of inactive services and customers leaving residences that were previously served by pipeline. However, sales were boosted by a 17% decrease in rainfall compared to the previous year.

“The Company continued its long-term redevelopment plans at its Parsons Lane site with the commissioning of its new bottling plant and warehouse, thereby improving both production efficiency and storage capacity.

“Infrastructure strengthening proceeded with the completion of the pipeline expansion through the main roads in Somerset. Future expansion through other parts of Somerset is planned to provide service to residences on secondary roads and in private estates thereby making more supplemental potable water supply available to more people.

“Production costs changed minimally as investment was made in new, more efficient, seawater reverse osmosis [SWRO] membranes and the utilization of the more efficient brackish water reverse osmosis [BWRO] plant was optimized for production of least cost water.

“This operations model allowed the Company to hold prices for its products and services unchanged through the year 2015, which was good news for customers. There is only so much that can be done to hold the line on operating costs and with increased taxes and accrued inflation pressures over the past two years it is unlikely the Company will go through another year without having to make some price adjustments.

“As a result of the Company’s strong financial performance, Directors have declared a bonus dividend of 14.5 cents per share based on 2015 results. This decision is consistent with the Company’s strategy of balancing payouts to shareholders with the need to preserve funds for future reinvestment in infrastructure. The dividend will be payable on June 29 to shareholders of record on June 15, 2016.

“The Company continues to carry a substantial cash/investment reserve. This remains earmarked for land and/or asset acquisition together with construction of a reservoir in the West end.

“The Memorandum of Understanding [MOU] with the Bermuda Government provides for the Company to acquire the Government’s assets for public water supply in the western parishes. Government has publicly invited proposals to value their assets. The Company awaits the outcome of the valuation.

“There have been several news headlines over the past year both locally and overseas about public water supply concerns. The Company has a long record of providing uninterrupted service, and under the dictate of the Board of Directors, will continue to plan ahead to meet the future demands for affordable public water supply to those parts of Bermuda it serves.

“Meanwhile the Company’s waters are continuously monitored during production, tested daily by Company staff, weekly by the Bermuda Government’s Health Department, and annually Bottled Water and piped product water are tested by a recognized laboratory in the U.S. The Company’s products have consistently met or exceeded internationally recognized drinking water standards.”

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