Manila Water Company reported a 16 percent hike in its net earnings for the first half of the year to P1.47 billion from P1.26 billion in the same period of 2008 on the back of a stable growth in core revenues and better tax and operating efficiency.

In a disclosure to the Philippine Stock Exchange, the firm said water sales volumes amounted to 194.4 million cubic meters (mcm), slightly lower than the same period last year.

Quarterly sales volume, however, has improved by 7 percent from 93.8 mcm in the first quarter of 2009 to 100.63 mcm in the second quarter of the same year.

“Due to the economic slowdown, consumption by commercial and industrial customers in the East Zone has been weak compared to the same period last year,” said Manila Water president Rene D. Almendras.

However, he noted that water sales were buoyed by an increase in the company’s residential customer base as Manila Water continued to aggressively expand in Rizal province and Taguig City.

As of June 2009, the MWC has already connected about 29,000 new service connections to the network. These have helped Manila Water increase its service coverage by almost 50,000 households to 1.06 million households, 99 percent of whom are now benefiting from 24-hour water availability.

Complementing the company’s expansion initiatives were efforts to minimize operating costs especially major items like manpower and electricity.

Network efficiency also continues to improve as Manila Water’s non-revenue water level has been reduced by approximately four percentage points to the current level of 16.4 percent from 20.2 percent in the first quarter.

Operating costs as of June 2009 grew by only 5 percent versus the same period last year. As a result, EBITDA improved by 6 percent to P3.3 billion from P3.1 billion last year. EBITDA margin continues to remain strong at 71 percent.

With the renewal of its concession, Manila Water is committed to spend around P10 billion in capex investments over the next 12 months. The amount will be used to further improve and expand both the water and wastewater networks in the East Zone.

Among the company’s major projects will be the implementation of the Three River Master Plan. Estimated to cost around P50 billion, the project will increase sewerage coverage to 100 percent of the catchment areas of the Pasig, San Juan and Marikina rivers.