Consolidated Water (CWCO) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $32.5 million, down 27% year-over-year, mainly due to lower services/construction revenue as major projects neared completion.

• Net income from continuing operations was $4.2 million ($0.26 per diluted share), while total net income including discontinued operations was $15.9 million ($0.99 per diluted share), driven by a one-time gain from the Mexico settlement.

• Retail segment revenue rose 8% to $8.2 million, with a 10% increase in water volume sold in Grand Cayman due to population growth and less rainfall.

• O&M contract revenue increased 75% year-over-year to $7.1 million, with $1.9 million contributed by the REC acquisition in Colorado.

• Cash and cash equivalents stood at $96.7 million as of June 30, 2024, with working capital of $131.2 million and minimal debt.

Financial highlights

• Q2 2024 gross profit was $11.6 million (36% margin), down from $15.5 million (35% margin) in Q2 2023.

• Six-month 2024 net income from continuing operations was $11.2 million ($0.70/share), compared to $11.6 million ($0.73/share) in 2023.

• Cash and cash equivalents increased to $96.7 million, mainly from the Mexico settlement.

• Dividend of $0.095 per share declared and paid in Q2 2024.

• Stockholders' equity was $206.7 million as of June 30, 2024.

Outlook and guidance

• Construction of the $81 million Goodyear, Arizona water treatment plant is nearly complete, with final completion expected by end of Q3 2024.

• The $147 million Honolulu, Hawaii desalination project is in the piloting, design, and permitting stage, with construction expected to start late next year.

• Anticipates continued strong water sales in Grand Cayman, recurring revenues from Caribbean and U.S. O&M contracts, and future growth from new projects in the Bahamas and Hawaii.

• Projected capital expenditures for 2024 are $7.1 million, including $2.5 million to expand the West Bay Desalination Plant.

• Management is monitoring inflation impacts, especially in the retail and manufacturing segments.