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GEORGE TOWN, Cayman Islands - Consolidated Water Co. Ltd. (NASDAQ: CWCO), a leader in water supply and treatment solutions, has announced a key development in its Hawaii desalination project. The company’s subsidiary, Kalaeloa Desalco LLC, received approval from the Honolulu Board of Water Supply for its pilot test results, marking a significant step towards the construction of a new desalination plant. According to InvestingPro data, CWCO maintains strong financial health with more cash than debt on its balance sheet and liquid assets exceeding short-term obligations, positioning it well for this major project.
The project, valued at $204 million, commenced in June 2023 and aims to produce 1.7 million gallons of desalinated seawater daily. The approval confirms that the water produced meets the quality standards of Honolulu’s current supply and poses no risk to the existing distribution infrastructure. With a market capitalization of $375 million and current trading price near its 52-week low, InvestingPro analysis suggests the stock may be undervalued, with analysts setting price targets significantly above current levels.
CEO Rick McTaggart expressed that this milestone is critical for moving forward with construction, which is anticipated to be the primary revenue driver for the company’s services segment in 2026 and 2027. The project includes a two-year development phase followed by a two-year construction period. Once operational, Consolidated Water has a 20-year contract to manage the plant, with options to extend for two additional five-year terms.
Consolidated Water, known for its operations in the Cayman Islands, The Bahamas, and the British Virgin Islands, has expanded its footprint into the U.S. market with this Hawaiian venture. The company is recognized for its comprehensive water services, including the manufacturing and servicing of water-related products, and providing design, engineering, and management services for water production, supply, and treatment. Notable for investors, the company has maintained dividend payments for 29 consecutive years, demonstrating consistent shareholder returns. For detailed financial analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US equities.
This press release statement also includes forward-looking statements that involve inherent risks and uncertainties. Factors that could affect the company’s actual results include market acceptance, changes in government relationships, negotiations with the Cayman government, and receivables collection in the Bahamas.
Investors and interested parties are reminded that while this news represents a positive development for Consolidated Water, it is based on statements from the company and should be evaluated considering the risks outlined in the company’s SEC filings.
In other recent news, Consolidated Water Co Ltd reported its fourth-quarter 2024 earnings, which fell short of analysts’ expectations. The company disclosed an earnings per share (EPS) of $0.12, significantly below the projected $0.29, while revenue was reported at $28.41 million, missing the forecasted $33.6 million. These results reflect a challenging quarter with a decline in both revenue and net income compared to the previous year. Total revenue for 2024 was $134 million, down from $180 million in 2023, and net income decreased to $17.9 million from $30.7 million. Despite these setbacks, the company managed to increase its cash reserves and working capital. Consolidated Water is focusing on infrastructure expansion and strategic acquisitions, with a significant seawater desalination project underway in Hawaii. The company also announced a new concession for its Cayman Water Company subsidiary, which continues to hold exclusive rights to produce and supply potable water in Grand Cayman. Analysts and investors are closely monitoring the company’s future earnings potential, especially with ongoing projects expected to impact revenue in the coming years.
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