Supply interruptions dampen Manila Water's 2019 income

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Scarce water supply and penalties imposed by government ate into Manila Water's profits in 2019, dipping 16 percent lower to ₱5.5 billion.

Metro Manila (CNN Philippines, February 28) — Manila Water saw its net income drop in 2019 amid supply interruptions and government penalties.

The listed firm supplying Metro Manila's east zone reported a ₱5.5-billion consolidated net income on Friday, down 16 percent from what it made in 2018. The utility said the result was expected due to a weeks-long water supply shortage for its customers which began in March 2019, as the water level at the La Mesa Dam — its main source — continued to dip.

READ: Zobel de Ayalas admit shortcomings led to Manila water crisis

Consolidated revenues rose by 11 percent to ₱21.95 billion, the company said in a disclosure. This was offset by a 22 percent jump in operating costs, which totaled ₱9.83 billion.

Manila Water was forced to implement a bill waiver program covering 1.2 million customers for March, and was penalized by the Metropolitan Waterworks and Sewerage System (MWSS) Board with a ₱1.13-billion fine. Of the amount, ₱600 million has been earmarked for the construction of a new water source.

Come August, the Supreme Court also handed a ₱921-million fine after Manila Water supposedly failed to put up sewerage systems for its service areas as required by the Clean Water Act.

The Ayala-owned firm found itself in deeper trouble in December when President Rodrigo Duterte ranted against the water firm for charging losses worth ₱7.4 billion to the government, which was decided upon by an arbitral court in Singapore.

Duterte went on to blast Manila Water and its counterpart Maynilad in a series of public speeches, even ordering MWSS to cancel contract extensions until 2037.

Manila Water's stock price plunged since. Ports giant Enrique Razon, Jr. bought into the company and acquired majority voting rights from the Ayala family in early February.

Shares at Manila Water slid by 3.13 percent to close the week at ₱11.76 apiece.