Watlington Directors Report To Shareholders
In a filing with the Bermuda Stock Exchange [BSX], Watlington Waterworks Ltd. releases the Directors report to the shareholders.
The full filing stated:
Watlington Waterworks Limited
Directors’ Report to Shareholders
For the Year ended December 31st, 2022.It appears that the year 2021 may have been the trough of our pandemic induced decline. Early optimism was warranted as demand strengthened through the first quarter of the year compared to the previous year. As the year progressed the Company received favourable tailwinds in the form of an extended period of below average rainfall which started in April and continued throughout the second and third quarters. The lack of rain boosted the demand for our products and services beyond previous forecasts. This is reflected in the much-improved performance for the year when compared to the previous year.
Piped water sales strengthened from 164 million gallons in the previous year to 205 million gallons. In the year 2020 the pandemic health regulations were implemented in late March. They had the effect of crushing demand for the rest of the year and then affected virtually all the next year. Piped water sales dropped from 23[ million gallons in 201[ the last full year prior to the pandemic to 203 million gallons in 2020 and then down to 164 million gallons in 2021. A full recovery to pre-pandemic sales levels remains to be achieved. For a full recovery to occur Bermuda’s tourism industry will have to further recover.
Bottled water sales also strengthened during the year by 2.8%, and total revenues for the consolidated Company were $11,747,788 compared to $10,258,500 for the previous year, while net earnings improved 26% to $2,254,265.
The Company’s 3-million-gallon reservoir project continued throughout the year. The reservoir construction was completed while ancillary electrical and pumping infrastructure installation was, and is, ongoing at year-end. The project is being done under contract with D & J Construction Company Ltd. and is being financed from the Company’s cash resources and by liquidating its short-term investments.
The Company continued to participate with BELCO in the Middle Road trenching project which started at BELCO’s Belmont sub-station. The project progressed from a start point in January that was east of the junction of Middle Road with Burnt House Hill to stop in December at the public dock at Jew’s Bay, Southampton. Trenching resumed in April of this year with the Company continuing to install its water main as the trench advances towards Barnes’ Corner junction. The new Middle Road water main will be connected to the existing water main at Barnes’ Corner which continues westward to Somerset.
The Company incurred substantial increases in costs across the entire spectrum of its operations due to inflation during the year. Consequently, the Company’s products and services pricing was adjusted on review at mid-year and at year-end. The Board will continue to monitor the Company’s position to meet its requirements with financial flexibility to adapt to changing market conditions. The Board’s policy is to make small incremental price adjustments in a timely manner rather than be forced to catch up to expenses by implementing substantial adjustments less frequently.
As it had done in previous years the Company also plans to replace a number of older failure prone water mains in 2023 with the aim to reduce leakage. Water lost from the system through leakage reduces the ability to ensure public water supplies are resilient to drought, with associated implications in terms of cost and the environment.
In keeping with its core values, the Company is continuing its work to provide its services in an ecologically sustainable manner with a focus on reducing its carbon footprint, maintaining a culture of integrity, and continuing to maintain their excellence in corporate governance working closely with its auditors.
