Water shortage penalty drags Manila Water net income down 18%

Manila Water Company Inc. has reported an 18% decline in bottom line for the first six months of the year, dragged by the water shortage that hit its East zone concessionaire area.

In a regulatory filing submitted by corporate governance and compliance manager Darwin Mendoza, Manila Water reported a net income of P2.9 billion from P3.555 billion in January to June 2018.

“This decline is still driven by the impact of the water supply shortage which hit its Manila Concession business early this year,” the company said.

The La Mesa Reserve breached its critical level of 69 meters which prevented Manila Water from meeting the demand of 150 million liters per day from the reservoir.

The brothers Zobel de Ayala —Manila Water chairman Fernando and vice chairman Jaime Augusto—took responsibility for the water interruptions.

In March Manila Water, the company announced a “one-time bill waiver scheme” in which the first 10 cubic meters will be free while “severely affected” customers will receive a P2,197.97 rebate.

Industry regulator Manila Waterworks and Sewerage System (MWSS) announced in April a P1-billion sanction on Manila Water in connection with the water crisis.

The penalty drove higher by 22% to P4.5 billion the company’s consolidated costs and expenses in the first half of the year.

“Overhead costs were the main contributors, doubling from the previous year to P1.2 billion due to the penalty imposed by the MWSS. Without the penalty, the increase in overhead costs would be at 14%.”

Manila Water’s concession area encompasses 23 cities and municipalities spanning 1,400 square kilometers that straddle Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, most parts of Quezon City, portions of Manila as well as 14 towns of Rizal province. —VDS, GMA News