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Profits dip for water authority

Profits dip for water authority

Second-quarter net profit for the exchange-listed Phnom Penh Water Supply Authority dropped nearly 26 per cent to $2 million from the same quarter a year ago, according to the most recent financial report released on October 11.

Sim Sitha, the director-general of PPWSA, said the decrease was largely due to new investments and expansion.

The same report also showed that in the second quarter of 2013, PPWSA had total revenue of $9.2 million, an increase of 19.1 per cent from the same period in 2012.

While quarterly profits fell, half-year results fared much better.

Revenue and net profit rose sharply in the first half of 2013 year-on-year, and analysts say the six-month data could help the water supply authority attract more investors and boost its faltering stock price, which fell to a record low in September.

For the six-month period ending June 30, PPWSA’s total revenues came to around $19 million, with profits of $5.5 million, representing respective increases of 24.3 per cent and 29.6 per cent against the corresponding period in 2012.

At the end of the six months, PPWSA had total assets of $259.5 million and total equity of $166 million, the report said.

Sitha said that revenue and profit hikes over the six-month period are direct results of water consumption growth in households and industry.

“The average water usage has sharply increased as the demand is huge, even though we just operated the new water treatment in [Meanchey district]. We get an increase of some 1,000 new customers every month,” he said. “And we’ve also expanded our coverage so our revenue should be coming along with that.”

Svay Hay, director of Acleda Securities Firm, said the water authority should go beyond simply publicising its balance sheets.

“Investors really want to know about the business operation, so the company should not only publish the financial result, but they also have to release information about their network’s expansion to the outskirts [of the capital] – it is crucial to attract interest from investors.”

For the next quarter, PPWSA expects to earn net profit of not less than $2 million, according to the report.

The price of PPWSA closed at 4,800 riel per share yesterday, according to data from the Cambodia Securities Exchange.

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