CWCO - Earnings call transcript Q1 2024 | Consolidated Water Co. Ltd.

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Operator

Good morning. Thank you for joining us today to discuss Consolidated Water Company's First Quarter of 2024 Results. Hosting the call today is Chief Executive Officer of Consolidated Water Company, Rick McTaggart; and the company's Chief Financial Officer, David Sasnett. [Operator Instructions].

Before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made by the company during the call. which everyone made call for the available in press remind and being the company's to the yesterday's be in will for release, website. like that section is today's recorded instructions Investor I'd Relations available of is telecom replay

CEO, Now like Company's the Sir, please to Consolidated call I'd McTaggart. over go turn Water to Rick ahead.

Frederick McTaggart

morning, results joining us XXXX. discuss our for Thank first for you, today you Rocco, everyone. Thank and of our good quarter to

release substantial issued in X press we X you reported million increase our As saw our XX% yesterday, revenue for a in of segments. business the growth $XX.X to quarter with across

quarter And sales a the retail of to a year due believe Grand water population nonrecurring retail XXXX. first Water segment during water the revenues our this growth quarter. area within truckers resident Our amounts rainfall to quarter and lesser in also Cayman. the service Retail Cayman XX% water of benefited benefited on we to sold volume of from Authority was Cayman to the utility from water lower first and this Grand during the increase extent compared on

revenue or compared Environmental quarter, by increase build Ramey Our was revenue $XX.X million million generated PERC a XX% year. subsidiary, resulted and revenues and newest Compliance operating last XX% Services maintenance or recurring $X.X this increase and from slightly segment design our to This a REC. higher in increase

growth desalination construct, public permitting continued the this further we engineering, that important schedule. of business. of Hawaii We're and investigations, pilot at and detailed operating continue collecting design to final is into after the X pilot a construction necessary a operating phase the of implemented plan with potential can that there X-year phase well and our in our in a and extensions project operating Hawaii the $XXX Hawaii the and development plant by comprised operate X-year segment installation to which clients' data of Hawaii. outreach permitting quarter full-scale phase seawater plant is pleased our water-stressed presence of provides and Oahu, REC report and and X-year provides operates treatment and This In operations on maintains project operation the during XXX very we to provide maintenance services in and year. acquired to REC's new channel track the Colorado. company last we for segment in freshwater in During design our million services than industry and a from and expanding plants revenue regions and region results wastewater Services revenue a U.S., resources business October It's more to improve significantly urgently first water in PERC's growth positioned technical build continued O&M performance new population the the drought quarter, has Mountain is reputation and regions which continues Southwest REC, $X.X of that of Eastern the record and to effective PERC. followed The XX-year site design, commissioning phase growth recognized to of under for the the contract in strong stellar million in similar due very top operating maintain to and scheduled clients operating bottom Plains are we conditions during that be and quarter, our us line. completed Colorado. option. is REC's XXXX. the and development needs

CFO, outlook take over who year, David recent to discussing our before more turn the the through quarter. our will the to and rest Now for the financial developments Sasnett, of like about us I'd details the call for

David Sasnett

morning, Rick. everyone. Good Thanks,

was $X.X a $XX.X the XX% generated which the first of increase year. first represents of the totaled by million, quarter As last segment, decrease for quarter revenue This in bulk retail Rick million $XXX,XXX million mentioned, our on $XXX,XXX revenue. revenue increase partially of revenue by for our were XXXX segment we Services in segment. our segment our offset driven increases in a These $X.X and increases our manufacturing of in

an of quarter. to due water increase X% increased during revenue the the sold volume overall we in retail Our

of We of of population XX-month quarter with labor between a the have an Cayman more than of December within the XXXX reflecting volume for water service and of than and year, that by sold quarter. water in to operations the Most workers and of area first in in XXX.X retail our record in mid-XXXX, was our which the last quarter to area the increase a previous on X.X% than the retail March number March water sold of the by the than resident increase our results within increase government area XXXX of Cayman, year. service first service in the Cayman as of the water between growth XXXX. islands quarter increase in by more other over history by in also our of the XXXX was XXXX This However, water and increased last sold purchased Authority is first which this growth, lower driven offset June XX% to estimated In survey, the We increased the first compared of to million desalinated Islands X.X% our the been government XXXX. retail impacted XXXX XX,XXX to sales consumers the a retail quarter by of rainfall a any the of gallons extent XXXX, in Cayman XX,XXX lesser customers September for data This purchased quarter more within period. actually population quarter Islands the the ex-patriot partially on volume company. first Grand a to of Water XXXX. believe reported the but increase less of has consistent

in energy contracts. and in is was XX% $XX.X million in manufacturing energy due Gross XX% Bahamas component was by $XX.X of of from XX% revenue, segment increase as X% sold rates which first revenue million in revenue segment from remainder in as bulk our quarter in of our operations X% water Bahamas was attributable from revenue revenue by volume to the revenue the IC. $X.X The construction to and an Bahamas. this the total increase the quarter both to XX% or under of total contracts revenue in production in segment activity. to or bulk operations Services the as The profit PERC. $XXX,XXX O&M the decrease for $X.X per Most of share or new our contracts up Our $X.X was discontinued revenue compared up subsidiary of generated quarter last quarter year. stockholders $X.XX to attributable or lower million of income Consolidated or decreased results first revenue million of $X.X for of and operations last Included quarter from due decreased to The increase share. net that maintenance of first million generated the the in million the due This increase pass-through well Water water the million is first a of for Net increased included the in quarter was maintenance first was notably, to increase approximately subsidiary costs XX% our XXXX, per of year. diluted diluted first which XXXX. $X.X income increased

our and the condition. to sheet financial turning Now balance

XX, was and and Working XXXX. Our cash of as equivalents debt our $XX $XXX,XXX. million $XX.X cash March was capital million, just totaled

Our stockholders' million. total $XXX.X equity was

CW-Bahamas XX, As March continue in ample Warren credit XXXX, capital of and of and maintain receivable working subsidiary as or solid evidenced financial levels numbers, Included of these million the strong an accounts by Sewage we Corporation Bahamas. from our liquidity $XX.X of our to to extremely capacity due condition.

then During were the informed intends in Bahamas and XXXX to by that March the end XXXX, CW-Bahamas receivable to below million of by XX $XX we June below with representatives Water in of $XX the Corporation Bahamas meetings the April this reduce accounts & Suite million to government year. with government and

Our West projected expenditures be $X operations for which approximately for includes new XXXX approximately for requirements capital of balance our million Bay the existing plant. $X.X incurred million, to liquidity of include

And quarterly back to future call such to are over Our in With if that, dividends paid April the million declared summary. XXXX. dividends $X.X completes financial like liquidity by also approximately dividends Rick. this in Board. the requirements may turn We I'd include our

Frederick McTaggart

our state-of-the-art desalination We highly maintenance the U.S. of quarter strategy, results growth first competitors. designs, is to solutions models In our our are again that water-stressed will strong areas delivery Caribbean treatment all U.S.-based most aesthetically project our our water innovative operating which superior David. pleasing reaffirms as plant business products regions once in the and that of business, we believe concentration historically customer manufacturing year. Last are world-class to first in improved provide base diversification year, most future Thanks, and we several focus returned results believe that anticipate from through our capabilities our strong of to customer successfully over the and our And on efficient and benefit past remain support of types the the manufacturing we years. in such this quarter, half continue expected consistent more it and and the periods. to is first remained terms financial performance largest will and from our strong manufacturing diversified and

be also of terms this that and believe We more customer regular will orders from in value. consistent

patent-pending pursue with part our specialized, we joint giants liquids formed technology last continued projects business X these using year diversify offerings, technology developed of partners. by venture our efforts to to a separation high-value As membrane

quarters, mining Over far various in impact X it several proposed and financial these projects If a developed performance the that significantly our offerings positively and expect products interest industry. in projects business, could new deal we have we in so or the have past in are this had particular, from successful the we future. industries, developing of product on great

Hawaii X.X on project the Hawaii well Oahu, to and track. in seawater looking MGD Now our underway desalination is project, plant

half We ground plant XXXX, construction to desalination well, activities, in plant design project we our have we for States. The more perform break ground significantly anticipate on continue worldwide this testing, pilot represent in we and expect the our on break the plant recognizing when to United second permitting. plant. expect full We Hawaii development will and first of of construction the preparation in revenue constructed including XXth to

in management strong design pursuing water construction clearly PERC's number the and For demonstrated PERC are services. This specialty, of its treatment currently a we opportunities is Western contract advanced potential the pursue us believe world-class experience demand we emerging U.S. O&M to remains for asset build and by design, opportunities. enables several

that the drinking last regulations reuse potable expected to December, protocols or state converting into DPR bolster first statewide systems systems California, example, approved water treatment or This be directly is drought-resilient. in which of advanced water. state. California of direct new regulation most DPR will thereby track drinking allow to wastewater more and to water For treatment be in regional water the PERC could supplies plants the of make plant water X operates currently one the on develop

As I this generated we we O&M maintenance PERC as can mentioned the and that as October, in million also future business results bode supports our water earlier, in be last operating year. These $X.X quarter acquired well REC, treatment similar to which as strategic replicated Western our our with plant continue other acquisition U.S. well grow revenue first belief success opportunities. this the historical It with in

see the in design U.S. for we ahead sales in well our underway project Grand of strong remainder optimistic Hawaii the many growth reasons. to project remain opportunities year activity as and as very the Looking bidding growth future U.S. operate and continue beyond, robust the This Western about we includes for our Cayman in build the water

currently subsequent are a years. which in number of and begin XXXX We design-build could projects, pursuing

Combined all the provide of further questions. believe all like value. with our of our or proprietary call for strong models strong project and and strengthening aesthetically represents report world-class pleasing design plant are efficient sales capabilities projects designs, are therefore, highly for to drivers with operating markets, innovative we our superior growth, being treatment tool. us CDR increased delivery that through pursued Rocco, open up this and competitive others shareholder Some advantages. to and competitive using and bidding believe others and customized profitability I'd flourishing these We now maintenance public

Operator

[Operator comes BofA. Thomas from And today's David Instructions]. first from question

David Thomas

the quarter. on Congrats

share be to seem guys a the do see I right you shares buyback? willing are significantly You undervalued. that heading in direction. Would the be to

Frederick McTaggart

Yes.

under actually to our shareholder we approval articles, for buyback. that have have So a for

for a event, in we be have a productive of we right it And would uses see that now. process. more So any other the capital bit

business So organically to we're other going continue the to potential opportunities. growing for in invest looking and acquisition

David Sasnett

shareholders a voted I'd like decade This to And to our ago. share proposed Well, than past, buyback In add unfortunately, it we that. Rick, to amendment our to the more our is actually down. shareholders. articles

So we shareholder time have to it it. on the the for said get buyback. we tried buttered shareholders tried against Rick But to approval establish doing a to one share a earlier, platform as

Operator

And Schwarz Matt our next from question today MAZE at comes Investments.

Matt Schwarz

of first year, development questions. in in segment. something XX-Q, got couple know of the is one you I've My Services the booking Hawaii. for about a talk like remainder the fixed around I million $XX the for fee the

So wondering, increased? year that of Hawaii? most be amount going for I'm is booked that fee was this development to And

David Sasnett

the result amended project as of the fee a believe has fixed $XX And of cost inflation. contract. and misnomer amount FP or customer can't get is bit The a been the implies paid period. amount actually in for we'll the development to to development price increased that a fixed the number represents is of that's the million. total I It that What be

remaining of of that inflation rates course in to the both necessarily for million and contract amount and backed recognize $XX sign the million the method. of that's we're construction indexes consumer of But over construction we million. input not value the The we the commences. period, But until $XXX actually in to development when occurs of record of are based entitled the period changes will the adjusted we revenue $XX that million contract labor on entitled the is the revenue drawdowns $XXX be as the upon the because So price out date commences.

recognize to the will to infer input of the revenue. fixed the is will be costs So will actual and that method, fee be revenue it on under period. you we the not shouldn't be we based upon amount incur The development correlated going development

Matt Schwarz

show be the will project under under the Or side? flow column? consulting how in those they'll design will be revenues the up when So will start under in, to Or show those -- they services be in will up it construction and captured?

David Sasnett

every, have us have we don't committed is under have project or I they element a them revenue, We project to because be we construction a it's design construction design don't of a contract separate to most contract. when design the will design When part It a have say build this to but construction construction major the for not contract. Every and them, the not that's signed yet. revenue customer, a letting of contract.

of as construction the with part the So the construction that's a pure goes it. work design main design of work. contract associated Any of into plant revenue side

Matt Schwarz

starting leaves made My you in come year. release maybe a are. reading I'm Rick, the this but press last I question hear comments the how call, you're you're talking is the on when some most the wouldn't new too bit tea second know But into pursuing recent I made much, to like you comments about sounds earlier around the read both conservative potential fruition XXXX. this you some projects in and things think And I call, it

in there on? your bit bullish projects It put sounds to some the and earlier interested your confidence there's in have progress months of I'm for you're the So in little a that you been guess, few how like in more, release I last changed things comments. terms commentary over of bidding

Frederick McTaggart

think XXXX. investors give in March, impacting seeing XXXX But of just that opportunities those. make impact pursuing in to to more of were I see down that these that are we some trying aware would projects opportunities been potentially were winding on that really we a sort don't XXXX. future anything consistent on successful we trying message we've we I've been are if bigger working some

all really that's we're there. message think to trying I that So

Matt Schwarz

of Maybe starting could layer you company's in to addition Hawaii XX%. know a you've of that run to talk simultaneously. a in ability the little bit What's contracts? I big terms In sizable project to middle them to got your capacity,

Frederick McTaggart

We Matt. the not definitely that have We're at about bandwidth for concerned that, point. this

getting is think We with would that team. completely that Our run our manageable in biggest job would concurrent that by place. focus Hawaii next be anything

Matt Schwarz

guys to Could balance and you number the the this a you about that to forget there's recovering you talk it's and would year look understand David. million the like some to I if I the cash But I'd of And just balance change for of then maybe. But quarter, that addition cash for correctly, cash lastly, outside a free as second, you at for sheet maybe progress of how see inflows receivables. should flow through move sheet Bahamas in expect potentially generation? $XX

David Sasnett

we Well, from the due have receivables Bahamas.

we that the Other We flow. on but construction of pending expect which that due retainer also until some will from collections than money have for Gate Red the will be more money receivables contract. There in generated period. [Indiscernible] shortly. and cash significant size substantial to a Authority paid are Those operations, plant, contract, million Water X of the it's paid our $X in are collect cash are came for that the be that that, we'll an the affect time just normal that is from

I it's the around project. something we've finished X completely after months think

Matt Schwarz

Gate? how that for was but on And Red Liberty, much

David Sasnett

think Gate a $X million Red is I around year. spend

Matt Schwarz

about those million we you I between a Bahamas $XX hard say So to cash? is And level normalized receivables? there it's do to to, down but think that? X think come where for the should what that's know incoming going

David Sasnett

Well, XX end to try June they're get going down informed I to the the million they the it XX. in of call, us year. by It's mentioned in

Operator

[Operator Instructions].

ROTH next Gerry comes Our Capital. question from Sweeney with

Brandon Rogers

info Sweeney. just This Hawaii you some around Rogers the know is line. was time wondering, on Brandon I Gerry I for project provided

start start of XXXX. anticipating the construction in to half to second you're or expecting plant So of the

the in to X-year XX-year the that the you're your that XXXX? would construction operating operating imply development of second phase half base, beginning and phase With of phase thinking

David Sasnett

that's schedule, would it to look stick we like. what If

Brandon Rogers

to PERC. over switching then And

have on? that PERC opportunities I contracts can an wondering if your you with You pipeline you just eyes of mentioned give was pipeline of either around the are new or us kind just in that update the a few PERC.

Frederick McTaggart

specifics mean X least at projects, getting of looking that there's at. on I that we're the into the without build side design

I As are in mentioned some the of bids. public them script,

one the we're ones that CDR design potential a other pursuing. least report of customized familiar is are At that opportunities The with. very we're opportunities in sector

made all on, projects. these point fairly that So large-sized early are but it's we the

So but getting Cayman, we're not as as there. big

can for contracts there's of to the least O&M land of So regular there's as we come these. And that at up standpoint From you opportunities pretty O&M think one were, again, there a of flow been bid. successful of to that this of some see see we've and landing beginning projects. for last results certainly our this year rest XXXX. year, continuing year compared into from these We of the

So in and and standpoint and that more require of make maybe up, not recycling. we're the year, have steady come the last the We're flow credentials placed is a presentation superior chasing our certainly over those. certainly we the we in and water from that technical competitors to region. but advanced are the the think placed well some We revenue the over to in terms well bids treatment there we're bids extent experience that the that benefited a of of

Brandon Rogers

me. And one more then just for

that general market have know areas I that demand any environment, of significant other opportunity Just there U.S. amounts like of lots in been you're you're seeing? Is drawing still Western seeing of interest

Frederick McTaggart

those opportunities, than standpoint joint those of equipment this projects that But well, what markets mentioned, the from from Western that are point. Other some newer We're be the really basic mentioned I mean and potentially using would are focus worldwide. we're the really the equipment we patented on nothing sales just else pursuits, the business that business. of that as I standpoint at the we these of doing the venture are technology. I mean, There's this now, focusing -- discuss could U.S. earlier. Caribbean

actually in So be we regions. other wouldn't operating

Operator

Instructions]. [Operator

Wealth from next Our Bair Advisors. Ascend comes question with John

John Bair

my U.S. expanding One questions was areas of answered about to there other somewhat within the

acquisition response would the was into entry an maybe different guess that there States? you are Southwest. in standpoint, outfits privately give the much I focusing the So pretty an about What owned areas United of potential from

Frederick McTaggart

at that purposely group. our there's we in mean, pursuing REC not didn't team there in anything The just ground sales integrating I I a opportunity we're John. with lot mention acquisitions into anything call. and think of focus the sure, is business. Consolidated Water this the specific Colorado, growing mean we've point. We really business this that and about gotten Yes, on

area as there's really to untapped we're an So which we're number going pursuing, from within mentioning organic That's would that. market of ROTH, was to I be growth opportunities now. PERC on right now. focus right Brandon a opportunities then that And the

we those potentially think we right are can that acquisition another just at we those enough away. looking So instead on focus of meaningful can

John Bair

on past, that, that I question a appears in had business dried Did footing think previous then lumpy. reasonably Is was that's where good. that type of flow on stable the the the here the I [Indiscernible] order period And now. It a things It more mentioned hear in OEM was up. comments correctly? right?

Frederick McTaggart

were We I backlog, post-COVID, backlog very of John. on the that correct, smoother talking guess, that's us. and shop basis. was that about now, for challenging Right operating Yes, maybe a to due ago, time was is a that years a much X.X bit

good the that working company a through, more and we significant that have the consistent we're much orders think be future. business to the We earnings will in of and of flow that,

John Bair

to seems share seem consider XX that out to like was companies allow would comment fairly these to efforts back share by given And ago, It again? about shareholder days. you years be that going buyback buybacks proposal putting the David's that so or robust

inclined share maybe to that So base allow consider you up? do more favorably would you be the Would that? to bringing

Frederick McTaggart

give shareholder us to market to something be it can something to to for We respond once take probably of could we consider. capital deferred I But the that a on we think consider have worthwhile is and approval it. for a mean schedules. the of it of it's some management collect like as in some I I flexibility that. lot do these make that get uses that we mean projects have. the able paid receivables will payment certainly conditions team productive were take we actually we these to Well, Bahamas the more

John Bair

advantage personal or company share it is program does my this belief viewed many cases. conditions take if is or think a buyback that that I own favorably that's of certain and place observation has wrong, under right in in

what of that feel price that alleviate lot share So a folks might undervalued. is help the

So just perception my on part.

Operator

like session. At question-and-answer the go call would Mr. Sir, back turn now over I this time, ahead. to this to concludes our McTaggart. please

Frederick McTaggart

Thank call. you, Rocco, and us forward in speaking for look I with second today report Take the joining all appreciate And August our we quarter earnings. I everybody when you to again care.

Operator

Thank you.

not Before we conclude that provide company's made today's harbor have includes cautions this statements events, expectations to, forward-looking Act and Litigation meaning and forward-looking the today's call, the The the revenues, call to company's provided Private plans, within I would assumptions XXXX, but safe Securities regarding objectives, Reform during like future call. includes we that regarding the statements including, statement information estimates. of future statements of conference in limited

cause Actual are the company's contribute or differ to future expressed and projections to is historical limited forward-looking outcomes and or project, Any we and conditions political this call conduct areas performance statement but assumptions, and in containing are Forward-looking difficult predict. the economic, and what words current materially that based of should, Statements are business statements. differences and expressions. involve believe, to social risks, from may uncertainties statements forecasts expectations, beliefs, would the on the in estimate, Factors results which and its plan certain business. to or in not such intend, we weather forward-looking serve, words not conditions are to, for which markets conference use its and usually not are related will each can or of tourism conduct business. include, country expect, by such phrases be identified guarantees made of industry the during facts similar assumptions, that the estimates,

report to with renewal other and Securities ability the we license relationships and negotiations matters, Our periodic other the including Grand government Exchange customers of our of the with successfully Commission. enter company's the entities the on detailed various for markets Cayman, as in retail regulatory new risks resolution and filings serve, our

the forward-looking discussion the the of For and more the this company's release attending Thank of operations during undertaking dial-in will Form and via website financial any refer instructions but reports evening. report This for annual to conference conference expectations be Any any I replay later filings, company's call or disclaims on speak date. SEC available regard with any for Please thereto replay call required to as information XX-Q. business, please statement of this Form including, statements Factors the changes limited changes at and of circumstances company statements earnings as uncertainties reflect risks forward-looking concludes or available management's its is any expressly starting call update made sections with call. made to during or not its The analysis conference everyone conditions Risk to by to would which except results or yesterday's for forward-looking about or based, events, associated refer conditions www.cwco.com. you the XX-K any law. and to, for quarterly on in today's its company's today's in obligations revise like presentation. remind that

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Consolidated Water (CWCO) 16 May 242024 Q1 Earnings call transcript