Consolidated Water’s third-quarter revenue and profit fell as lower construction, operations and maintenance, and manufacturing activity outweighed growth in retail and bulk water sales. Revenue declined 11.9% to $30.9 million, while net income from continuing operations attributable to shareholders dropped to $2.4 million, or $0.15 per diluted share.
The quarter also brought a new 25-year retail water license in Grand Cayman and several project developments, including major equipment orders in Florida and a newly awarded California water-purification contract.
Key details
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Revenue and earnings declined. Revenue was $30.9 million, down from $35.1 million a year earlier. Net income from continuing operations attributable to shareholders was $2.4 million, or $0.15 per diluted share, compared with $5.6 million, or $0.34 per share. Including discontinued operations, net income was $2.3 million, or $0.14 per share, versus $5.5 million, or $0.34 per share.
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Retail and bulk sales grew, but lower rates weighed on retail profitability. Retail revenue rose 5.7% to $8.2 million, supported by higher energy pass-through charges, a 1% increase in water sales volume and a higher rate for a major commercial customer. Those factors offset lower retail rates under Cayman Water’s new license. Management said the lower rates reduced retail gross profit.
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Bulk revenue increased 20.8% to $10.1 million. Growth came mainly from higher energy pass-through charges and, to a lesser extent, revenue from the new Cat Island desalination plants in the Bahamas. Bulk gross profit increased, but higher diesel costs and additional maintenance expenses reduced gross margin as a share of revenue.
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Manufacturing and services were weaker. Manufacturing revenue fell 39.7% to $2.8 million as the value of contracts completed or underway declined. Services revenue dropped 31.7% to $9.8 million. Construction revenue decreased to $3.5 million from $6.4 million, while recurring operations and maintenance revenue fell to $6.1 million from $7.7 million, mainly because contracts with three California customers expired in the first quarter.
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Cayman Water’s new license took effect August 1. The 25-year license preserves the company’s exclusive right to produce, distribute and sell potable water in its licensed Grand Cayman service area. Its rate structure lowers base rates for customers and retains an annual rate-adjustment mechanism, subject to regulatory verification and approval.
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Florida equipment orders total about $10.1 million. A municipality on Florida’s east coast placed orders for nanofiltration membrane treatment equipment and horizontal cartridge filters. Consolidated Water described these as its largest municipal membrane-equipment and horizontal-filter orders to date. Delivery is scheduled for November 2027.
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The company expects manufacturing revenue to remain below 2025 levels this year. Management said it has bid on about $10 million of water-equipment manufacturing projects expected to be decided in the fourth quarter of 2026. It is also tracking roughly $45 million in Florida municipal water projects expected to go out for bid within the next six months. Management said these opportunities support its expectation of a strong 2027 for the manufacturing business.
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A Hawaii desalination project moved forward. In July, the Honolulu Board of Water Supply issued a limited notice to proceed, releasing about $6 million for long-lead equipment procurement.
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A California water-purification contract was awarded after the quarter. On October 12, Consolidated Water announced an approximately $39.8 million design-build agreement with the City of Pismo Beach for the Central Coast Blue Advanced Water Purification Facility. The company will design, construct and test the facility, train city personnel and support initial operations. Construction is expected to begin in spring 2027, with the full design, permitting, construction and commissioning process anticipated to take about 24 months.
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Liquidity remained substantial. Cash and cash equivalents totaled $129.2 million at September 30, and working capital was $145.1 million.
The quarter’s results reflect a mix of near-term pressure from lower construction, maintenance and manufacturing activity and growth in water sales. The new Cayman license establishes a long-term framework for the retail business, while the Florida orders and Pismo Beach award add substantial project work with deliveries or construction expected mainly from 2027 onward.