Saturday, 20 June 2009

Philippines' Maynilad reports 11% growth in revenues

Jose Bimbo F. Santos

Maynilad Water Services Inc. said on Friday it posted double-digit revenue growth in the first half on the back of efforts to expand coverage.

"There was an 11% revenue growth and 17% volume growth for the first half," Rogelio L. Singson, Maynilad president, said during the last leg of public consultations in Manila for the 15-year extension of its concession agreement with the government.

From below 50%, Maynilad has reached three-quarters of its customer base since the new management took over in 2007, executives said. Maynilad earlier reported that water pressure in its west zone concession had improved to 20 pounds per square inch (psi) from seven psi.

Metro Pacific Investments Corp. (MPIC) had disclosed that the net income of affiliate Maynilad for the first quarter amounted to P685 million, accounting for P245 million of MPIC’s income.

Maynilad’s contract to operate the west zone area in Metro Manila will expire in 2022 and the utility is seeking a 15-year extension to 2037. East zone concessionaire Manila Water secured last April regulatory approval for a similar 15-year extension.

According to Maynilad, water rate increases for the next three years may be trimmed by three quarters if the concession extension is approved.

"The extension would be the only way for us to decrease tariffs due to the longer recovery period we will have," Mr. Singson said.

Construction-based DMCI Holdings owns 44.59% of Maynilad while Pangilinan-led Metro Pacific holds 55.41%. The two firms bought the utility when it was re-privatized by the government in 2007. The original owners, the Lopezes, returned the franchise to the government two years earlier.

Maynilad’s service area covers Pasay, Caloocan, Las Piñas, Parañaque, Valenzuela, Muntinlupa, Manila except Sta.Ana, some areas of Makati and Quezon City, Malabon and Navotas, as well as Cavite City, Rosario, Imus, Noveleta, Bacoor, and Kawit in Cavite.

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