Consolidated Water Co. (CWCO) is a developer and operator of advanced water supply and treatment plants. The company also manufactures and services various products and offers design, engineering, management and other services related to commercial and municipal water production, supply and treatment.
Let’s look at CWCO’s recent second-quarter 2021 results and understand what has changed in its key risk factors that investors should know.
Revenue of the company dropped 13% year-over-year to $16.7 million in the second quarter. While its services and bulk revenue increased during this period, the drop in the top-line was due to the impact of the COVID-19 pandemic on its retail segment and a reduction in orders from a major customer.
Meanwhile, to offset the impact of the reduced orders, CWCO has been diversifying manufacturing segment products and customer base.
The CEO of CWCO, Rick McTaggart, said, “PERC is currently awaiting decisions on recent bids for design/build projects and operating contracts valued at more than $55 million. These projects could also represent recurring annual revenue of more than $2 million in ongoing operating and maintenance agreements.”
In the second quarter, CWCO’s gross profit dropped 17% year-over-year to $6.1 million due to lower retail revenue. Net loss per share widened to $0.11, as compared to a net loss per share of $0.07 a year ago. (See Consolidated Water stock chart on TipRanks)
Now, let’s look at what’s changed in the company’s key risk factors.
According to the new Tipranks’ Risk Factors tool, CWCO’s main risk category is Production, which accounts for 26% of the total 23 risks identified. Since June, the company has added one key risk factor under the Macro & Political risk category.
CWCO highlights that amid the COVID-19 pandemic, the current economic conditions are negatively impacting the supply chain essential for its operations.
In the first half of 2021, CWCO saw supply chain issues for raw material, components, chemicals and capital expenditures. If these challenges continue then the company’s financials will get impacted.
The Macro & Political risk factor’s sector average is at 11%, compared to CWCO’s 17%. Shares of the company have declined 16.2% over the past six months.
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