Manila Water Company (Photo credit: Wikipedia)Ayala-led Manila Water Co. Inc. obtained the highest issue credit rating of PRS Aaa from Philippine Rating Services Corp.
A triple A credit rating is deemed “of the highest quality with minimal credit risk” and that the borrower’s capacity to meet financial commitment on the obligation is extremely strong.
PhilRatings is the only domestic credit rating agency in the country accredited by both the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission.
In assigning the rating, PhilRatings took into account Manila Water’s proactive management and competent technical staff with a proven track record; the company’s efforts to expand its service areas to ensure continued growth; sustained profit performance; more than adequate liquidity position, financial flexibility and capitalization which can support additional debt.
Manila Water is the exclusive concessionaire for the East Zone of Metro Manila, comprising 23 cities and municipalities. It continues to expand its market locally with projects in Laguna, Pampanga, Boracay and Cebu. It also has international ventures in Vietnam.
“Throughout its operating history, the company has been able to meet and even surpass its regulatory and financial targets, making efficient use of its capital, accumulated industry experience and partnerships. The company’s management has also been very proactive in dealing with issues relating to the water industry, such as the development of new water sources,” PhilRatings said.
Manila Water chalked a net income of P4.27 billion in 2011, up seven percent from a year earlier. It sustained upward traction in the first quarter this year with net earnings rising 64 percent to P1.34 bilion.
As of end-2011, the company had comfortable levels of cash and short-term investments amounting to P5.89 billion. The amount further increased to P6.45 billion at the end of the first quarter 2012.
PhilRatings said the projected growth in Manila Water’s retained earnings is expected to support additional debt.
The company is currently undergoing its third rate rebasing period as the concessionaire of the East Zone. Rate rebasing occurs every five years after 1997, when the company was awarded the concession.
Manila Water has already submitted the requirements for the process to the regulators and is expecting feedback within the year.
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