Watlington Waterworks Directors Report
In a filing with the Bermuda Stock Exchange [BSX], Watlington Waterworks Ltd. releases the Directors report to the shareholders.
The full filing stated:
The Year 2019 was one of contrasting halves. During the first six months the Company’s performance was weaker than it had been in previous years because rainfall had been above average, which in turn had depressed the Utility Division’s revenue. This overshadowed the group which had seen stronger performances from both the Bottled Water Division and retail plumbing sales.
The Company made a stellar recovery in the second half of the year as the rains diminished and Utility sales recovered to eliminate a four-million- gallon deficit from the first six months during the second half. The Utility Division was able to further improve its performance by reducing piped water losses thereby returning a significantly stronger result in the second half. Bottled Water maintained its strengthening trend over previous years throughout the year, and retail activity, which has been consistently improving performance since opening the new retail shop, achieved a new record for retail sales.
The Company’s potential, which had been highlighted in the half-year report was fully realized during the second half of the year. The result for the twelve months ending December 31 surpassed expectations to establish a new record for net earnings. This outcome was exceptional given the previous best year was established during the 2017 America’s Cup year.
The Company continues with its long-term infrastructure strengthening in order to continue upgrading its capabilities to sustain public water supply in Bermuda. Excavation of the site purchased earlier in 2019 for building a new reservoir and treatment plant was completed in January 2020. Final permission for development has been granted by the Department of Planning and it is anticipated a Building Permit will be obtained during the current year. Looking forward the Company remains optimistic we will be able to commence construction during the present year, subject to how quickly the Island can re-open after COVID-19 can be overcome.
Following the year-end, the World Health Organization officially declared the outbreak of COVID-19 a pandemic in March 2020, which has led to the Bermuda Government gradually increasing preventative measures up to declaring a State of Emergency that commenced on April 4th, 2020.
As an Essential Service the Company has continued to provide public water supply, albeit at substantially reduced demand levels. Management is closely monitoring the situation and how it may affect the population and the economy. This has caused disruption to businesses and economies globally and the Company expects this to negatively impact its operating results for the year 2020 and possibly beyond.
The Company considers the effects from the pandemic to be a non-adjusting event after the reporting period. Given the inherent uncertainties, which are substantial, it is not practicable to determine the impact of COVID-19 on the future operating and financial performance of the Company or to provide a quantitative estimate of this impact.
The Company is able to continue to operate as a going concern and has substantial cash and investment reserves to sustain itself through any foreseeable downturn with all staff continuing to be employed for the production, storage and distribution of potable piped water and “Pure Water” bottled water and the efficient administration of the Company.
