Consolidated Water Co. Ltd. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue decreased 11.9% to $30.9 million in Q3 2026 from $35.1 million in Q3 2025.
• Net income from continuing operations attributable to stockholders was $2.4 million ($0.15 per diluted share), down from $5.6 million ($0.34 per diluted share) in Q3 2025.
• Net income including discontinued operations was $2.3 million ($0.14 per diluted share), down from $5.5 million ($0.34 per diluted share) in Q3 2025.
• Gross profit for Q3 2026 was $9.8 million (31.8% of revenue), compared to $12.9 million (36.9% of revenue) in Q3 2025.
• Cash and cash equivalents totaled $129.2 million as of September 30, 2026.
• Working capital was $145.1 million as of September 30, 2026.
• Equity attributable to stockholders was $226.2 million as of September 30, 2026.
• For the first nine months of 2026, revenue was $93.8 million, down 8.5% from $102.4 million in the same period of 2025.
• First nine months net income from continuing operations was $10.2 million ($0.64 per diluted share), down from $15.7 million ($0.97 per diluted share) in 2025.

Guidance and Future Outlook:

• Management expects full-year 2026 manufacturing revenue to be below 2025 levels.
• Management anticipates a strong 2027 for the manufacturing business.
• The Hawaii Kalaeloa desalination facility is expected to begin construction in the first half of 2027, subject to remaining permits and approvals.
• Construction of the Pismo Beach, California project is anticipated to begin in spring 2027.
• Approximately $45 million in Florida municipal water projects are expected to go out for bid within the next six months.
• Pending bids for water equipment manufacturing projects valued at approximately $10 million are expected to be decided and awarded in the fourth quarter of 2026.

Business Segments and Product Lines:

• Retail revenue increased 5.7% to $8.2 million in Q3 2026, driven by higher energy pass-through charges and an increased rate for a major commercial customer, offsetting lower rates under a new license.
• Bulk revenue increased 20.8% to $10.1 million in Q3 2026, driven by higher energy pass-through charges and revenue from new Cat Island, Bahamas desalination plants.
• Services revenue decreased 31.7% to $9.8 million in Q3 2026; construction revenue fell to $3.5 million from $6.4 million, and O&M revenue fell to $6.1 million from $7.7 million due to the expiration of three California contracts in Q1 2026.
• Manufacturing revenue decreased 39.7% to $2.8 million in Q3 2026 due to a decrease in the total dollar amount of contracts completed and in progress.
• Received approximately $10.1 million in purchase orders from a Florida municipality for nanofiltration membrane equipment and horizontal cartridge filters, with delivery scheduled for November 2027.
• Advanced the Hawaii seawater desalination project with a $6 million Limited Notice to Proceed for long-lead equipment procurement.
• Announced a $39.8 million design-build agreement with the City of Pismo Beach, California, for the Central Coast Blue Advanced Water Purification Facility.

Market and Competitive Landscape:

• Cayman Water's new 25-year retail license became effective August 1, 2026, establishing a long-term regulatory framework and preserving exclusive rights to produce, distribute, and sell potable water in Grand Cayman.
• The new Cayman license rate structure lowers base rates for customers but retains an annual water rate adjustment mechanism subject to regulatory verification.
• Management cites excellent reputation, world-class manufacturing capabilities, and deep knowledge of the Florida water equipment market as competitive advantages for upcoming opportunities.

Risks and Challenges:

• Higher diesel costs and incremental maintenance expenses reduced gross margin as a percentage of revenue in the bulk segment.
• Permitting delays and the timing of remaining approvals for the Hawaii Kalaeloa facility could impact construction schedules.
• Risks include cost overruns and liquidated damages under fixed-price contracts.
• Potential risks include changes in relationships with governments and clients, collection of delinquent accounts receivable in The Bahamas, and future rate determinations by the Utility Regulation and Competition Office.

Management Commentary and Tone:

• CEO Rick McTaggart noted that increases in retail and bulk revenue were offset by lower construction, O&M, and manufacturing revenue.
• Management expressed confidence that the new Cayman license provides a solid foundation for future growth despite lower base rates.
• Management stated that the Florida purchase orders and Pismo Beach agreement demonstrate the breadth of manufacturing capabilities and bode well for 2027.
• Management emphasized a disciplined approach to growth and a focus on translating strengths into sustainable long-term growth and enhanced shareholder value.

Other Key Points:

• Dividends declared per common and redeemable preferred shares were $0.14 for the quarter ended September 30, 2026.
• The Hawaii Kalaeloa facility includes a 20-year operations and maintenance contract with two additional five-year extension options.
• The Pismo Beach project is intended to provide a drought-resistant water supply and protect the groundwater basin from seawater intrusion.
• The company has $150 million of contracted backlog for the Hawaii project not yet recognized as revenue.
• The company received a $10.1 million order for its largest municipal membrane-based water treatment equipment and horizontal cartridge filter orders to date.