Consolidated Water Co. Ltd. Q3 FY2024 earnings call

• Retail: Benefited from business and population growth on Grand Cayman, unaffected by hurricanes. - Bulk: Increased gross margin from Red Gate II O&M contract, offset Bahamas revenue decline. - Manufacturing: Focused on higher-margin products, gross profit up 84%. - Services: Grew O&M revenue with REC integration, opportunities in Colorado due to regulatory changes. - Hawaii desal project: Advancing through pilot, design, permitting; planned construction start Q4 2025, $147M project. - Bahamas: Progressing on Cat Island desal project, $7M 15-year agreement.

Retail: Revenue increased due to higher water sales volume from business and population growth on Grand Cayman. Bulk: Relatively consistent revenue compared to last year, but gross margin increased due to the Red Gate II O&M contract. Services: Declined in construction revenue but saw a $2.5 million increase in O&M revenue, including $2.1 million from REC. Manufacturing: Revenue decreased slightly, but gross profit grew by 84% to $1.6 million.

• Hawaii project: Plan to start construction Q4 2025, construction phase is largest revenue portion. - Manufacturing segment trend expected to continue stable and profitable. - Bahamas project: $7M 15-year agreement for Cat Island desal plants.

• Tourism and weather conditions affecting water sales. - Economic, political, social conditions in countries where business is conducted. - Regulatory matters, like retail license renewal on Grand Cayman. - Ability to enter new markets successfully.

Q: About Hawaii desal project timeline and cost allocation.

A: Frederick McTaggart said they expect to start construction in the fourth quarter of next year, with the development phase about $27 million and the balance of $147 million being construction costs. David Sasnett clarified that revenue recognition in the design phase is based on actual costs incurred and there are inflation adjustments.

Q: PERC, REC project backlog.

A: Frederick McTaggart said they are busy bidding jobs, market is stronger, and they are adapting to be competitive.

Q: Cat Islands opportunity.

A: Frederick McTaggart said there are potential $1 million a year in incremental revenues over 15-20 years from Cat Island projects and there's growth opportunity in Nassau's capacity