Q4 2023 Consolidated Water Co Ltd Earnings Call

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None: Yes.

None: Ladies and gentlemen at this time, we'll begin the question and answer session. Once again to ask a question you May Press Star and then one using a touchtone telephone.

None: So withdraw your question you May press star and two.

None: If you are using a speakerphone. Please pick up your handset prior person Mckee to ensure the best sound quality.

None: Once again that is star and then wanted to join our question queue.

None: Pause momentarily to assemble the roster.

None: Our first question today comes from Gerry Sweeney from Roth Capital. Please go ahead with your question.

Gerard J. Sweeney: Hi, Good morning, Rick and David Thanks for taking my call and happy 50th.

None: Thanks Jerry.

Gerard J. Sweeney: Couple of questions I got it.

Gerard J. Sweeney: Try and organize them the best I can but he was writing a bunch of things down here, but.

Gerard J. Sweeney: Starting with PERC Liberty.

Gerard J. Sweeney: Under budget.

And ahead of schedule right so great.

Gerard J. Sweeney: <unk> on that front how much.

Gerard J. Sweeney: Does that project, maybe become a poster.

Gerard J. Sweeney: Postal project for what per can do and go after projects of similar size or or additional projects. How is there a way you can use that.

Gerard J. Sweeney: Liberty project to drive additional awareness and end market what part can do.

None: Yes, absolutely Jerry in fact.

None: We have.

None: A nice little lineup for people that want to take tours of the plant.

None: It's actually.

None: Quite a feat to get coming out of the Covid lockdowns in supply chain issues to get that done.

None: Under budget.

None: Ahead of schedule, so theres a lot of <unk>.

None: People that are interested in learning about that for sure.

None: I've got a couple of companies you can talk to them maybe teach you a couple of things.

None: I'll save that for later.

None: On the <unk>, but also on the PERC side, how much it perk is I mean.

None: Yeah.

None: With the PERC model, you're not bidding for projects or are you or are you.

None: Clients coming to you with an issue and then perf designs it and its a negotiated process can you describe what goes on there.

None: So.

None: Sort of flagship.

None: Sales product as our customized design report.

None: <unk>.

None: We get ahead of any sort of public bidding or anything on these projects and we provide the client with the well he pays a modest fee for approximately a 20% design.

None: Uh huh.

None: A plant that would meet his needs and we gave.

None: A maximum price it.

None: That point too.

None: Design and construct the plant so.

None: If that client is so inclined. He can then proceed to negotiate agreements with us to do the design and construction.

None: We also.

None: Participate in.

None: Tenders.

There are some opportunities for the ctr the customized design report.

None: But we also.

None: Pursue publicly bid jobs.

None:

None: For both O&M and design build.

Got it Gary the Liberty Utilities project.

None: Perfect example of where our Ctr process was employed sure that project that project did not go to tender we were able to it too.

None: The cell to the Liberty utilities.

None: Management.

None: The advantages of our Ctr model and they went directly with us.

None: I think honestly, we paid them, we save them a lot of money from what would have been incurred had taken to thing to tender than Hawaii. Perfect example.

None: Responded to a to a bid.

None: And we were the winning bidder. So we try to approach you know, we'd like to get people too.

None: Two.

It has to do with <unk>, but if we don't we'll go ahead and bid on a project and we think we're very competitive in either case.

None: Can you can you use the ctr program to help you bid.

None: If that makes sense.

None: Well all the same.

None:

None: Components go into both I mean, it's just the way.

None: The way its presented.

None: I mean, we are very I mean, it's just I mean typically in with the turbo.

None: Turbo project, we presented a CVR took only about three years to decide that.

None: That was the best way to go.

None: Did other cost.

None: Estimates for go into public tender with it and we were much more.

None: Cost effective and we could deliver the project within the time period that they needed so thats.

None: It's really a lot of this stuff goes.

None: It turns on how fast you can deliver the project when you go with the.

None: Traditional design bid build model.

None: Makes a lot more time to for the engineering company too.

None: Design the project.

None: Get all the approvals then.

None: Bid the project to construction companies I mean, it's just a much longer process.

None: And.

None: With us it's much quicker and its one point of responsibility for the client it's not.

None: Multiple points engineering companies consultants construction companies subcontractors that sort of thing it's just.

None: We take full responsibility for performance based contract award.

None: A lot of the peripheral costs that the client would incur or eliminated if they go directly with us towards this less expensive for them. It's really is.

None: I mean, as we said in the comments are in VIX <unk> remarks.

None: We just need to convince the customers of the advantages of this because they are substantial.

None: That's sort of what I was getting at I mean, some people have to do beds, but.

None: I mean the.

None: The Liberty utility project I think underscores what you can do some great switching gears, a little bit staying with PERC, but.

None:

None: Stimulus dollars in United States, I I J a.

None: Then some regulation changes even in California.

None: Direct potable reuse was approved recently.

None: Uh huh.

None: How do these items impact the market in California for park and in terms of projects pipeline and what you're seeing.

None: Well on the IPR.

None: DPR.

None: We are currently operating the Santa Monica.

None: Water.

None: Recycling plant.

None: Which we designed.

None: And that.

None: I think Santa Monica has their eye on being the first.

Entity to actually.

None:

None: Implement rack correct reuse soon so the plant's operating it's creating producing.

None: Producing tremendous.

None: Product water there.

None: I think its 1 million gallons per day.

None: They are treating.

None: I was there just last week actually after the Roth conference in.

None: We have a great operating team theyre running the plant in <unk>.

None: So beautiful plant again, congratulations to the city for Brazil.

None: And I think there'll probably be one of the first entities to do the direct crude will reuse.

None: I'm sorry, the other part of the question well. It was really my understanding is you have stimulus dollars coming into play, but then you also have.

None: Direct potable reuse D P R.

None: Sounds good and feels as though in the read we're getting is more projects coming down the pike.

None: Driven by both those sort of.

None: Opportunities yes.

None: Stimulus dollars just a quick comment the only project that we're involved in that is getting money from the federal government is the Hawaii project are getting grants. So we are aware of that but.

None: We're not involved in anything else here.

None: I'm curious does secret that desalination has been a challenge in California.

None: But that's my point of view APR right I heard yes. They also but everybody everyone knows they need a lot more water and you can only recycle so much.

None: <unk> is another opportunity for us I think they will I think a lot of potential clients will take that approach as they can't build a T cell facility and it would be sourcing and these sorts of potable water for them. So I think it's very positive for us.

None: That's what I'm hopeful for.

None: And then final question I don't want to monopolize it sounds.

None: It sounds like retail came in.

Are you back at 100% or is there still some opportunity for the pickup from post COVID-19 or add or expansion or growth in the region and then I'll I'll jump back in line. Thank you.

None: Beyond <unk> and.

None: And sales volumes, where we were before COVID-19, so we've already exceeded that.

None: I hadn't seen that Theres no sort of recent population estimates for Grand Cayman, but.

None: I mean, it really feels like there's a lot more people on the island, it's not just tourists I think.

The population is growing there so that was kind of reluctant to say anything in this.

None: And the speech, there, but it really feels like.

None: When they get the new population data will show some pretty substantial growth. There. So if you visit Grand Cayman. If you just the last three or four years the amount of construction activity has taken place on the island are substantial.

None: And there is still construction underway there. So I think overall activity on the island has increased.

None: I think in part as Vic said, it's probably driven by a population increase but tourism is back it's very healthy there as evidenced by the fact that if you try to get a hotel room in Grand Cayman in the months of February or March.

None: <unk> gone through the roof, which tells you there is nothing available dataset.

None: Okay. Thanks, guys I appreciate you taking so many questions.

Jerry: Jerry Thanks, Tim.

Jerry: Yes.

Jerry: Our next question comes from Richard Siracusa. Please go ahead with your question.

Richard Siracusa: Yes, Hello can you hear me.

Dan: Yes, Dan.

Richard Siracusa: Yes, I just curious if you could update us on the status of the Mexico situation.

Richard Siracusa: Richard Thanks for asking.

None: We are.

Richard Siracusa: I'm still trying to resolve that through an arbitration.

Richard Siracusa: And we've had discussions with.

Richard Siracusa: The Mexican officials I mean, theres nothing more that we can say about that at this point, it's an ongoing.

Richard Siracusa: Legal matter.

None: Yeah, Okay. Thank you and congrats on a great quarter.

None: Thank you thanks.

None: Once again, if you would like to ask a question. Please press star and then one.

None: Our next question comes from John Bair from ascend wealth Advisors. Please go ahead with your question.

John H. Bair: Thanks, Good morning, gentlemen, and congratulations on a great year, a great way to celebrate.

John H. Bair: It's anniversary and also I.

John H. Bair: I would like to say I really.

John H. Bair: <unk> got a chuckle out of Rick's closing comments, almost a paraphrase of aligning the Ghostbusters, we have already closed.

John H. Bair: Right.

Yeah.

John H. Bair: I got it I got a good chuckle out of that one so anyway.

John H. Bair: The purpose.

John H. Bair: What's that.

John H. Bair: So that was intentional.

John H. Bair: Good good good good I'm glad I picked it up.

John H. Bair:

John H. Bair: So my question is regarding the yeah.

John H. Bair: Did a lot of bid strong bid activity and so forth, what's sort of the timeline I know they all are.

John H. Bair: Vary based on the size of the projects and so forth, but do you have a feel for you know what kind of of of slow you might have one.

Contract Awards that you have bids out for.

None: Well there is.

None: There's at least one that comes to mind that as an O&M contract and we bid that several months ago its being evaluated.

None: So it's really up to the client on.

None: The timeline I would expect that we would hear.

None: Something back this year.

None: It's a meaningful con con.

None: Contract.

None: From the standpoint of design build.

None: <unk> in the things that we're pursuing now.

None: We'd probably not come to fruition this year so.

None: They take from from the time you hear about these projects.

None: Qualify through the bidding process. It typically takes about a year.

None: So that's why we were.

None: Are.

None: Certain that as certain as we can be that.

None: The Hawaii project, which is a $150 million, which is almost twice the size of Cerro ball in terms of dollars will start.

None: Recognizing revenues from that in the third quarter of next year.

None: So that's about as much as we can tell you right now John Yeah. I was just trying to get a sense of the balance between some of these.

None: Larger type projects take longer to come.

None: Come to fruition versus maybe some shorter term smaller projects.

None: I don't know that I mean, we have we have.

We have clients that we do O&M work for that.

None: From time to time require upgrades to their plants and replacements, but I mean, those are sort of in the $3 million to $5 million range.

None: The more meaningful projects.

None: $30 $40 million and up.

None: They typically.

None: Take about a year to cycle through and if we're successful then.

None: We would.

None: Obviously get moving on those sometimes next year.

None: And do you think there's any.

None: Slowdown or any any excuse me.

None: With the interest rates being paid.

None:

None: Has that slowed the process down at all.

None: Or not so much the process, but the.

None: Projects coming out looking you know to be bid because of higher cost.

None: Yes.

None: I'm not I really can't answer that one I had I hadn't heard that thats, causing any delays on client side I mean typically.

None: By the time, we hear about the project it's already fully.

None: The decision to proceed has been fully made so okay.

None: Okay, John in a lot of these speculator client.

None: To deferred.

None: Work already.

None: So they need to go ahead and proceed regardless of what.

For the interest costs may be right.

None: Hey.

None: Very good well, thanks for taking my questions and congratulations again.

None: Thanks, John Thank you.

None: And once again, if you would like to ask a question. Please press star and then one.

None: All your questions you May press star and two.

None: And ladies and gentlemen at this time in showing no additional questions. We will conclude today's.

None: Question and answer session and today's conference call, but before we conclude I would like to provide the company's safe Harbor statement that includes cautions regarding forward looking statements made during today's call.

None: The information that we have provided in this conference call includes forward looking statements within the meaning of the private Securities Litigation Reform Act of 1090 fall, including but not limited to statements regarding the company's future revenues future plans objectives expectations and events.

None: <unk> and <unk>.

None: Forward looking statements can be identified by the use of words or phrases usually containing the words believe estimate project intend expect should or.

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None: Statements that are not historical facts are based on the company's current expectations beliefs assumptions estimates or.

Cash and projections.

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None: Any forward looking statements made during the conference call are not guarantees of future performance and involve certain risks uncertainties and assumptions.

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None: Actual outcomes and results may differ materially from what is expressed in such forward looking statements.

None: Factors that would cause or contribute to such differences include but are not limited to.

None: Tourism and weather conditions in the areas, we serve the economic political and social condition of each country in which we conduct or planning to conduct business.

None: Our relationships with the government entities and other customers we serve.

None: Regulatory matters, including resolution of the negotiations for the renewal of our retail license on Grand Cayman.

None: Our ability to successfully enter new markets and in various other risks as detailed in the company's periodic report filings with the Securities and Exchange Commission.

None: Well each.

None: For more information about risks and uncertainties associated with the company's business. Please refer to the management's discussion and analysis of financial conditions or results of operations and risk factors sections of the company's SEC filings, including but not limited to its annual report on the Form 10-K and quarterly reports form 10.

None: In Q.

None: Any forward looking statements made during the conference call speak as of today's date.

<unk> expressly disclaims any obligations or undertaking to update or revise any forward looking statements made during the conference call.

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None: I would like to remind everyone that this call will be available for replay starting later this evening.

None: Refer to yesterday's earnings release for dial in replay instructions available via the company's website at Www Dot EWC a backhaul.

None: Thank you for attending today's presentation. This concludes the conference call.

None: You may now disconnect your lines.

None: Okay.