• Revenue: $134 million in 2024, down from $180 million in 2023.
• Retail Revenue: Increased by $1.6 million to $31.7 million due to a 4.5% increase in water volume sold.
• Bulk Segment Revenue: Declined from $34.6 million in 2023 to $33.7 million in 2024.
• Services Revenue: Decreased from $77.3 million in 2023 to $17.6 million in 2024.
• O&M Contracts Revenue: Increased by 51% to $29.3 million in 2024.
• Manufacturing Segment Revenue: Increased slightly to $17.6 million.
• Gross Profit: $45.6 million or 34% of total revenue in 2024, compared to $61.9 million or 34% in 2023.
• Net Income from Continuing Operations: $17.9 million or $1.12 per diluted share in 2024, compared to $30.7 million or $1.93 per diluted share in 2023.
• Net Income Including Discontinued Operations: $28.2 million or $1.77 per diluted share in 2024, compared to $29.6 million or $1.86 per diluted share in 2023.
• Cash Equivalents: Increased by $57 million to $99.4 million.
• Working Capital: Increased by $44 million to $132.8 million.
• Stockholders' Equity: $210 million.
• Capital Expenditures for 2025: Approximately $10.3 million.
• Dividends Paid: Approximately $6.3 million.

• Warning! GuruFocus has detected 6 Warning Sign with CWCO.

Release Date: March 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Consolidated Water Co Ltd (NASDAQ:CWCO) reported strong retail water sales and a record volume of water sold in Grand Cayman, driven by population and business growth.
• The company successfully completed two major design-build projects early in the year, contributing to expected revenue and operating income.
• Recurring revenue from operations and maintenance contracts increased significantly, with a 51% rise over the previous year.
• The acquisition of the REC subsidiary in Colorado provided a new channel for business expansion into water-stressed regions.
• The Hawaii seawater desalination project is advancing, with construction expected to begin next year, potentially boosting revenue and earnings in 2026 and 2027.

Negative Points

• Overall revenue decreased from $180 million in 2023 to $134 million in 2024, primarily due to a decline in service segment revenue.
• Net income from continuing operations attributable to shareholders dropped from $30.7 million in 2023 to $17.9 million in 2024.
• The Bahamas business experienced a revenue decline due to reduced energy pass-through charges, impacting overall financial performance.
• Construction revenue and services saw a significant decline due to the completion of major projects, affecting total revenue.
• The Hawaii project faced delays not caused by the company, pushing the expected construction start to the following year.

Q & A Highlights

Q: Can you provide more details on the decline in service segment revenue for 2024? A: David Sasnett, CFO: The service segment revenue decreased by $47 million due to the completion of major construction contracts, including PERC's contract with Liberty Utilities and the Red Gate plant project. This decline was partially offset by a 51% increase in recurring revenue from operations and maintenance contracts.

Q: How is the Hawaii desalination project progressing, and what impact will it have on future revenue? A: Frederick McTaggart, CEO: The Hawaii project is advancing through the development stage, with construction expected to begin early next year. This $204 million project will significantly impact revenue and earnings in 2026 and 2027 during its construction phase.

Q: What are the expectations for the retail water segment in Grand Cayman? A: Frederick McTaggart, CEO: Retail water sales in Grand Cayman have grown due to increased population and business activity. We expect continued growth, supported by the expansion of our West Bay plant, which will increase capacity by 1 million gallons per day.

Q: Can you elaborate on the financial health and liquidity of the company? A: David Sasnett, CFO: Our cash equivalents increased by $57 million, reaching $99.4 million, with working capital at $132.8 million. We have practically no debt, allowing us to invest in infrastructure and potential acquisitions strategically.

Q: What are the future growth prospects for the U.S.-based operations? A: Frederick McTaggart, CEO: We see growth potential in our U.S.-based manufacturing, design-build, and O&M businesses, particularly with the addition of REC in Colorado. We anticipate further expansion in Colorado and California, enhancing our recurring revenue streams.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.