Manila Water expanding in 15 cities

MANILA, Philippines - Ayala-led Manila Water Company is expanding its operations in around 15 cities in the Philippines, hopefully within the year.

In a press briefing after its 2013 annual stockholders’ meeting held in Makati City yesterday, Manila Water president and CEO Gerardo Ablaza Jr. said that even with the expansion activities eyed overseas,  the company is prioritizing expansion plans within the Philippines.

“Our strategic priorities are what we call the VIP countries:   Vietnam, Indonesia, and Philippines. In terms of prioritization, my desire is to first see more opportunities in the Philippines before going abroad. After all, there are still many areas outside Metro Manila that do not get quality  and consistent water supply. So our first priority is really other Philippine areas,” he said.

Manila Water is looking at expansion opportunities in 15 cities with a population concentration of at least half a million which would provide the company the critical mass for providing efficient  water service.

Abalaza said the company has already identified these areas and have conducted extensive research on some of these cities but declined to identify these locations so as not to preempt developments.

He said the company hopes to implement the new water projects within the year.

Manila Water has reported a net income of P5.44 billion for 2012, up by 28 percent year-on-year because of higher billed volume in it east zone concession and the stronger performance of its new subsidiaries Laguna Water, Boracay Water, Clark Water.

The Thu Duc Water BOO Corporation in Vietnam in which Manila Water acquired a 49 percent stake in December  2011 also contributed to 2012 revenues.

The company’s revenues grew 21 percent to P14.55 billion, while its core income rose 27 percent to P5.72 billion.

Its billed volume for 2012 was placed at 579.4 million cubic meters, up by 39 percent year-on-year.

The East zone concession area, which is the company’s main income source, accounted for 427.3 million cubic meters of the billed volume, up four percent from 2011.

Ablaza said that while net income is still expected to grow in 2013, it will not be as robust as in 2012 because of the higher base set and partly because of the delayed implementation of new rates for 2013.

Overseas, Manila Water first gained traction in Vietnam with the acquisition of a 49-percent stake in Thu Duc Water in late 2011.

In October last year, the company announced that it intends to acquire half of  Jakarta-based water company PT PAM Lyonnaise Jaya (PALYJA).

In a disclosure to the local bourse, MWC confirmed that it has signed a  share purchased agreement with Suez Environment (Suez) to acquire its 51-percent equity in PALYJA.

The closing of the acquisition, however, is still subject to certain government and regulatory approvals in Indonesia.

“Hopefully, there will also be other opportunities that will open outside of

Jakarta. But we are being very careful and selective because there is only so much human resource that we can deploy,” said Ablaza.

The company is also coordinating with the Metropolitan Waterworks and Sewerage System (MWSS) on the development of new water sources.

Ablaza said the company is awaiting the results of the study being conducted by the Metropolitan Waterworks Sewerage System (MWSS) on new water sources but said the Kaliwa-Kanan River System in Quezon province is one of the options the company is looking at.