Consolidated Water Shares Surge After Q2 Results, Records 110% Revenue Growth, Beats Estimates

Consolidated Water CWCO reported a second-quarter (Q2) 2023 revenue increase of 110% year-over-year to $44.2 million, beating estimates of $30.27 million.

Retail revenue grew 16%, services jumped 377% Y/Y, and manufacturing increased to $4.1 million.

Revenue increase, Retail primarily due to a 14% increase in the volume of water sold and higher energy costs; the services segment was due to a rise in plant design and construction revenue, and Manufacturing was due to increased production activity.

EPS was 47 cents (+178% Y/Y), beating the consensus of $0.22.

Gross profit doubled to $15.46 million from $7.47 million a year ago. Goss margin contracted by 53 bps to 34.9%.

Income from operating improved by 271.2% Y/Y to $9.48 million, and margin expanded by 931 bps to 21.4%.

During the quarter, the company signed a $204 million contract to design, build, operate, and maintain a seawater desalination plant in Hawaii.

CWCO held cash and cash equivalents of $47.7 million as of June 30, 2023.

Consolidated Water CEO Rick McTaggart cited tourism recovery in Grand Cayman and ongoing construction projects, plus increased project bidding activity as positive signs of growth.

"We also anticipate that the more than $350 million in major multi-year projects that we secured over the last 18 months will have an increasing positive impact on our earnings in future quarters," he said.

Price Action: CWCO shares are trading higher by 6.61% at $21.66 premarket on Friday.

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