Logo of Phnom Penh Post newspaper Phnom Penh Post - Water utility widens revenue stream

Water utility widens revenue stream

A technician monitors water systems on a control panel at the Phnom Penh Water Supply Authority last year.
A technician monitors water systems on a control panel at the Phnom Penh Water Supply Authority last year. Pha Lina

Water utility widens revenue stream

The capital’s listed water utility inaugurated a new treatment facility yesterday that will increase its production capacity of clean water by 30 percent, and add to its revenue stream – a move likely to impress its shareholders.

Phnom Penh Water Supply Authority (PPWSA) officials opened the Niroth 2 water treatment plant on the southern outskirts of Phnom Penh, a $61 million complex that will allow the company to produce an additional 130,000 cubic metres of water per day to supply a growing and thirsty city.

The new facility increases the company’s total production capacity to 560,000 cubic metres a day, allowing it to expand services to Takhmao City in Kandal province.

Prime Minister Hun Sen, who attended the inauguration ceremony, said that despite the added capacity, PPWSA would continue to purchase water from private companies.

“A task that PPWSA must do is to buy water from private companies in communes that in the past were under provincial administration, but are now in Phnom Penh,” he said, referring to 20 communes that were formally adopted into the city limits in 2012.

He said the government would provide funds for the water utility to increase its purchasing power, ensuring that it honours its commitments.

“We need to inject more capital into the company so that it can purchase water from the right suppliers and from those who it still has contracts with.”

In 2012, PPWSA became the first company to list on the Cambodia Securities Exchange (CSX), floating a 15 percent stake. The company, which derives revenue from water connection services and the sale of treated water, has struggled in recent years to improve its margin.

According to its 2016 annual report released on Tuesday, PPWSA’s revenue grew by 3.57 percent last year to $49.5 million while net profit fell by 13.5 percent to $12.3 million. The company will pay out $3.5 million in dividends to common shareholders by the end of the month.

Svay Hay, CEO of brokerage firm Acleda Securities, said the Niroth 2 water treatment plant would allow PPWSA to expand its business operations, resulting in more revenue and higher returns for its shareholders. He said the expansion should help attract more long-term institutional investors that look for larger dividend payouts.

“Now that PPWSA has the ability to earn larger revenues, it should help attract more investors to buy the company’s stock,” he said.

The company’s shares on the CSX, however, closed down 40 riel yesterday at 3,960 riel amid low-volume trading.

Lamun Soleil, director of marketing operation department at CSX, said it was not surprising that the treatment plant’s inauguration failed to push the company’s stock price up as the Niroth 2 project had been known for years.

Nevertheless, he said the new facility would likely spur more business activity as the company reaches more consumers.

“With Phnom Penh’s massive expansion in recent years, PPWSA will have to increase its activities to cover new customers,” he said. “So its operations will also increase in size.”

MOST VIEWED

  • 12th Cambodia int’l film festival to see return of Hollywood star

    Phnom Penh is set to come alive with the magic of cinema as the highly anticipated 12th Cambodia International Film Festival (CIFF) takes centre stage. Boasting an impressive line-up of 188 films from 23 countries, including captivating shorts, feature films, documentaries and animation, the festival promises an

  • Bareknuckle champion wants Kun Khmer fighter

    Dave Leduc, who is the current openweight Lethwei boxing champion in Myanmar, has announced that he will travel to Cambodia this year to challenge SEA Games gold medallist Prum Samnang any time that is convenient, after their planned match later this month in Slovakia was

  • Fresh Covid warnings as Thai hospital fills

    A senior health official reminds the public to remain vigilant, as neighbouring countries experience an increase in Covid-19 cases, with the latest surge appearing to be a result of the Omicron XBB.1.5 sub-variant. Or Vandine, secretary of state and spokeswoman for the Ministry of Health,

  • Struggling Battambang artist dreams of staging full-scale gallery exhibition

    Leav Kimchhoth, a 55-year-old artist from Battambang province, is a familiar face to locals and tourists alike on the streets of the riverside in Phnom Penh. The one-armed painter and illustrator often hawks his work near the night market on weekends and public holidays. He

  • 1.4 billion dollar Phnom Penh-Bavet expressway due in four years

    The Government, through the Ministry of Public Works and Transport, has officially signed a public-private partnership agreement with a private company for the construction of a Phnom Penh-Bavet Expressway project that will connect the capital to Svay Rieng province. The budget for the project is

  • New Law on Taxation comes into effect

    Cambodia has enacted the eagerly-awaited new Law on Taxation, which aims to improve the national tax regime’s compliance with present and future international standards and economic conditions; encourage accountability, effectiveness and transparency in the collection process; and promote investment in the Kingdom. King Norodom