BISX-listed Consolidated Water has reported a slight uptick in profit in the second quarter of 2014, despite reductions in water sales in The Bahamas attributable to successes achieved by the Water and Sewerage Corporation in cutting down on water lost from its system.Reporting on its 2014 second quarter financial performance, CWCO revealed that net income attributable to the company's shareholders totaled $2.75 million, or $0.19 per diluted share, for the three months ended June 30, 2014, compared with net income attributable to CWCO shareholders of $2.85 for the same period last year - a 3.4 percent rise.Total revenues for the second quarter of 2014 increased slightly - around two percent - to approximately $16.9 million, compared with approximately $16.6 million in the second quarter of 2013.This increased revenue was primarily attributable to a rise in retail water revenues of around eight percent due to an increase in the number of gallons of water sold by the company's retail operations in the Cayman Islands and the company's facility in Bali, Indonesia.Its bulk water revenue fell due to a decline in sales to the WSC in The Bahamas. CWCO said: "Bulk water revenues declined slightly (two percent) to approximately $10 million (59 percent of total revenues) in the second quarter of 2014, compared with approximately $10.2 million (61 percent of total revenues) in the prior year quarter. "In 2013, the WSC purchased water volumes from the company's Blue Hills plant that were significantly higher than the contracted capacity of the plant. However, as a result of water conservation and loss mitigation efforts it has conducted since that time, the WSC has lowered the amount of water lost by its distribution system. And, consequently, in 2014 the WSC has reduced the volume of water it purchased from the Blue Hills plant."The company confirmed that gross profits in the bulk water business segment declined by $45,000 or one percent in the quarter relative to the year earlier, as the company saw a reduction in water sales by its Bahamas operation of $659,000. "The impact of this development was largely offset by higher bulk water volume sales in the Cayman Islands and Belize, as well as improved operating efficiencies at our bulk water production facilities," added CWCO.This reduction in water sales confirms reports from WSC General Manager Glen Laville that the organization's non-revenue water reduction program, pursued using a $81 million loan from the Inter-American Development Bank (IDB), is starting to show some signs of bearing fruit. When executing the loan with the IDB in 2012, the corporation indicated that it was not generating revenue from over 5 million gallons of the water it supplies daily in New Providence due to factors such as theft and leakage. Laville said at the time that this figure was equivalent to over 50 percent in losses and was valued at nearly $16 million annually.Laville has suggested that the investment in the water loss reduction will "pay for itself" over time.

Elsewhere, CWCO said that "significant changes" in its consolidated balance sheet, when compared with December 31, 2013, resulted from a reduction in accounts receivables, in large part due to payments made by the WSC, and purchases of land by the company's Mexico subsidiary. "During May and June 2014, the WSC made significant incremental payments to the company to reduce the past due amounts it owed to our Bahamian subsidiary," noted David Sasnett, chief financial officer of the company. "As a result, our consolidated accounts receivable decreased by approximately $6.9 million from December 31, 2013 to June 30, 2014."Interest income increased to $366,772 for the second quarter of 2014, up from $169,796 in the second quarter of 2013 due to the receipt of interest due on past due accounts receivables from the WSC.Consolidated gross profit was relatively unchanged at approximately $6.4 million (38 percent of total revenues) in the most recent quarter, versus approximately $6.4 million (39 percent of total revenues) in the second quarter of 2013. Consolidated general and administrative expenses increased five percent to approximately $3.8 million in the second quarter of 2014, compared with approximately $3.6 million in the year earlier quarter.

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