East zone's water delivery declined 2% in first half

The volume of water delivered by Manila Water Company to customers in the east zone concession area declined by 2 percent in the first six months because of the water supply shortage caused by the mild El Niño dry spell.

“Billed volume declined by 2 percent, directly driven by lower water supply and service availability during the period,” Manila Water said in a statement.

This was offset by Manila Water's operations in the provinces and overseas.

Manila Water's net income for east zone dropped 25 percent in the first half to P2.5 billion. Overall, its net earnings went down by only 18 percent to P2.9 billion.

The company said the one-time bill waiver program also affected topline growth, with the company recognizing a revenue reduction of P353 million in the east zone. Revenues in the six-month period reached P8.1 billion, as cost and expenses rose 6 percent to P2.3 billion driven primarily by the penalty imposed by MWSS in first quarter of 2019.

Outside the east zone, domestic business operations saw higher earnings contribution while foreign operations held steady. On the other hand, new business developments continue to provide market expansion and new sector opportunities, it said.

Consolidated revenues improved 7 percent to P10.5 billion, driven by increased billed volume and higher average effective tariff in several key business units.

Consolidated costs and expenses also reflected the challenges experienced in the east zone, increasing 22 percent from the previous year to P4.5 billion. Overhead costs were the main contributor, doubling from the previous year to P1.2 billion due to the penalty imposed by the Metropolitan Waterworks and Sewerage System. Without the penalty, increase in overhead costs would be at 14 percent.

As a result, Manila Water's consolidated net income declined from the same period last year. Excluding one-offs, core net income improved by 8 percent to P3.8 billion.

Manila Water said it already successfully restored water availability to east zone customers.

While the shortage stemmed from the inadequacy of allocated raw water supply, Manila Water addressed prevailing challenges and restored water service to affected areas.

The company said it implemented network management and efficiency programs, bringing non-revenue water down to an all-time low of 7.5 percent.

Reinforced by a more deliberate network management and optimization program, 24/7 water availability at sufficient pressure has been successfully restored to 99 percent of Manila concession customers.

“This has been achieved even in the face of a still significantly reduced raw water supply allocation from Angat Dam – now at only 36 cubic meters per second from the normal 46 cms. These efforts have become the catalyst for equitable water distribution – Manila Water is now working with MWSS and other key government agencies to launch a demand management and water conservation campaign,” it said.

Manila Water said it undertook its own supply augmentation efforts, with its Cardona Plant now producing 62 million liters per day, well over the 50 MLD committed capacity. The recommissioning and development of new deep wells continues, with a current total yield of over 50 MLD.

“Looking to the future, Manila Water works closely with MWSS on key components of the Water Supply Master Plan for the East Zone. To date, the MWSS Board of Trustees has approved four new water source project proposals which are now under review by the MWSS Regulatory Office,” it said.