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Consolidated Water Co. Ltd. has a market cap of $115.6 million; its shares were traded at around $7.82 with a P/E ratio of 22.1 and P/S ratio of 2.3. The dividend yield of Consolidated Water Co. Ltd. stocks is 3.8%. Consolidated Water Co. Ltd. had an annual average earning growth of 9.5% over the past 10 years. GuruFocus rated Consolidated Water Co. Ltd. the business predictability rank of 4-star.
Highlight of Business Operations:Net income for the three months ended June 30, 2011 increased by $896,587 to $1,929,662 ($0.13 per share) as compared to $1,033,075 ($0.07 per share) for the three months ended June 30, 2010.
Total revenues for the three months ended June 30, 2011 were $14,835,872 as compared to $12,699,485 for the three months ended June 30, 2010, representing an increase of $2,136,387, or approximately 16.8%. The increase in consolidated revenues is primarily attributable to our bulk segment, which generated approximately $1.6 million more in revenues in the three months ended June 30, 2011 than in the comparable quarter of 2010. Gross profit for the three months ended June 30, 2011 was $5,251,205, or approximately 35% of total revenues, as compared to $4,231,302, or approximately 33% of total revenues, for the three months ended June 30, 2010. For further discussion of revenues and gross profit for 2011 see the “Results by Segment” analysis that follows.
Revenues from services provided in the three months ended June 30, 2011 were $506,353 as compared to $463,380 in the three months ended June 30, 2010. Services revenues increased slightly from 2010 due to higher fees earned for management of the Bermuda plant. The management contract for the Bermuda plant expired on June 30, 2011, and we do not expect to generate any further fees or revenues from our Bermuda affiliate. We generated revenues and gross profits from our Bermuda affiliate of $421,915 and $308,135, respectively, for the three months ended June 30, 2011 and $231,721 and $144,427, respectively, for the three months ended June 30, 2010.
Gross profit for our services segment was $518,425 and $273,253 for the six months ended June 30, 2011 and 2010, respectively. The lower gross profit for 2010 stems from the decreased plant construction revenues and from liquidated damages of $260,000 assessed by the Water Authority Cayman during the three months ended June 30, 2010 as a result of our inability (due to various factors including the failure of a key plant component purchased from a third party) to complete the refurbishment and commissioning of the Red Gate plant by its contract deadline, and construction cost overruns on this plant. We were required to reduce the cumulative gross profit on the Red Gate plant by approximately $403,000 during the three months ended June 30, 2010, as these liquidated damages and cost overruns represented a significant variance from the construction cost estimates we utilized under the percentage-of-completion method to record our revenues and gross profit on the Red Gate plant construction for previous quarters.
Our operating activities generated net cash of approximately $28.4 million over our last three fiscal years and an additional $7.9 million in net cash for the six months ending June 30, 2011. As of June 30, 2011, we had cash balances totaling approximately $50.8 million and working capital of approximately $60.9 million. We believe our cash on hand and cash to be generated from operations will be sufficient to meet our liquidity requirements for the next 12 months, which include approximately $2.7 million in principal and interest payments on debt and quarterly dividends, if declared by our Board of Directors. We are seeking approximately $10 million in new financing for the planned expansion of our Blue Hills plant in the Bahamas and believe we have a sufficient credit standing and adequate funding sources to obtain this new financing.
On October 28, 2009, the Court ordered the BVI government to pay OC-BVI at the rate of $13.91 per thousand imperial gallons for water produced by OC-BVI for the period subsequent to December 20, 2007, which amounted to a total recovery for OC-BVI of $10.4 million. The BVI government made a payment of $2 million to OC-BVI under the Court order during the fourth quarter of 2009, a second payment of $2 million under the Court order during July 2010 and a third payment under the Court order of $1 million in February 2011.
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