MANILA, Philippines – Manila Water’s net income dropped by 16% to P5.5 billion in 2019 from the P6.5 billion in 2018, mainly due to penalties incurred because of the water shortage and additional expenses to mitigate the supply problem’s impact.

The Ayala-led company’s costs and expenses soared by 22% to P9.8 billion, as it paid a P534-million penalty imposed by the Metropolitan Waterworks and Sewerage System last year.

Manila Water also implemented a one-time bill waiver program to help alleviate the inconvenience of customers affected by the water shortage.

Earnings from the Manila concession area declined by 22% to P5.1 billion. Manila Water’s subsidiaries outside the main concession area helped shore up the parent firm, with earnings soaring by 131% to P450 million.

While profits declined, operating revenues or money coming in from the company’s main business grew by 11% to P21.95 billion from P19.82 billion in 2018.

It said 75% of revenues came from its main business of selling water, while 16% came from environmental and sewer charges. Other revenues came from supervision fees, connection fees, and septic sludge disposal, among others.

Manila Water spent a total of P12.6 billion for projects, 78% of which were spent to improve services for the Manila concession.

The Ayala-led company is set to get new leadership under ports and gaming tycoon Enrique Razon. (READ: Razon’s buy-in of Manila Water won’t stop contract review – DOJ)

Razon’s Prime Metroline Holdings and Manila Water signed a subscription agreement for the latter’s 820 million shares worth P10.7 billion, representing a 25% stake in the company.

Razon is aiming to get more shares held by the public after setting a tender offer worth P13 per share.

He is set to obtain 51% voting interest in Manila Water, while the Ayala group will get 31.6%. – Rappler.com