Matt [Last Name Unknown]'s questions to Consolidated Water Co Ltd (CWCO) leadership • Q2 2025
Question
Matt from Western Standard asked about the drivers behind the strong gross margin in the manufacturing segment, the timeline to fill new capacity, and the reasons for the sequential increase in O&M revenue. He also sought an update on the Hawaii project permits and the company's capital allocation strategy given its large cash balance.
Answer
CEO Frederick McTaggart and CFO David Sasnett attributed the high manufacturing margin to a focus on higher-margin jobs, efficient operations, and high utilization, noting the new facility will significantly increase capacity for larger bids currently in process. The O&M revenue increase was driven by favorable contract term changes. On the Hawaii project, McTaggart detailed that key remaining hurdles are the archaeological and health department permits. Regarding capital allocation, he stated the company is actively evaluating M&A targets and P3 project opportunities, and will continue to assess shareholder returns following the recent dividend increase.