Q2 2026 Consolidated Water Co Ltd Earnings Call Transcript
Key Points
- Retail revenue increased despite a 2% drop in water sales volume, driven by a base water rate increase for a major non-potable customer.
- Bulk revenue grew 20% and bulk gross profit rose 27%, aided by higher energy pass-through charges and two new Cat Island desalination plants.
- Secured a new 25-year retail water utility license in Grand Cayman, providing long-term regulatory certainty and earnings visibility.
- Received $10.1 million in purchase orders for municipal water treatment equipment in Florida, the largest municipal membrane order to date.
- Strong balance sheet with $132.6 million in cash and no significant debt, supporting future growth and strategic opportunities.
- Consolidated revenue decreased 2% year-over-year due to a 49% decline in manufacturing revenue.
- Gross profit margin fell to 33% from 38%, impacted by lower manufacturing gross profit and a less favorable services revenue mix.
- Services O&M revenue declined after two contracts expired in Q1 2026, partially offset by a new California contract.
- Manufacturing revenue for full-year 2026 is expected to be below 2025 levels, with current backlog and order activity only supporting future improvement.
- Delays in the Hawaii desalination project persist due to a prerequisite archaeological permit, with construction start uncertain despite recent regulatory communications.
Good morning.
Thank you for joining us today to discuss Consolidated Water Company's second quarter of 2026 operating and financial results.
(Operator Instructions)
CEO, Rick McTagger.
Thanks, Nick. Good morning, everyone. I appreciate you joining us today. While our consolidated second quarter revenue reflected softness in manufacturing, we were pleased to see growth across our retail, bulk, and services segments, along with some important developments that support our outlook for the balance of this year and into 2027.
Retail revenue increased modestly despite wetter weather, which reduced Grand Cayman water sales volume by 2%. The increase in retail revenue was driven by a base water rate increase for a major non-potable water customer. And this was following the May 2026 expiration of its concessionary water purchase agreement. Our bulk revenue increased 20% and bulk gross profit increased 27%, mainly due to higher energy pass
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