Manila Water Posts Strong 9-Month Earnings Growth; Defensive Like Maynilad but Dividend Yield Trails Rival

Manila Water Company, Inc. (MWC) reported a robust financial performance for the nine months ended September 30, 2025, driven by tariff adjustments and operational efficiencies across its concessions.

Revenues climbed 9.1% year-on-year to ₱30.05 billion, supported by the third tranche of the approved Rate Rebasing tariff implemented in January. Despite a slight dip in billed volume in the East Zone, cost discipline helped sustain profitability.

Net income attributable to the parent surged 25.4% to ₱12.67 billion, while EBITDA rose 14% to over ₱21 billion, improving the EBITDA margin to approximately 73%. Core net income, excluding one-off gains, grew 15% to ₱11.6 billion.

The company also booked a ₱1.1 billion gain from the sale of its East Water investment in Thailand, boosting international contributions. Domestic operations outside Metro Manila delivered steady growth, with Visayas and Mindanao businesses benefiting from tariff adjustments and higher billed volumes.

As of September 30, total assets stood at ₱241.67 billion, while stockholders’ equity increased to ₱85.94 billion. Manila Water invested nearly ₱18 billion in capital expenditures, with 85% allocated to East Zone infrastructure projects.

Defensive Utility Play
Analysts note that Manila Water shares characteristics with Maynilad, its West Zone counterpart, as both operate under regulated concessions with predictable cash flows and tariff-based revenue structures. This makes them attractive defensive plays for investors seeking stability in uncertain economic conditions.

Dividend Yield Comparison
Despite its strong fundamentals, Manila Water’s trailing dividend yield of about 4.8% (based on a 2025 dividend of ₱1.841 per share and a recent price of ₱38.70) lags Maynilad's, which typically offers a higher payout ratio and yield in the 6–7% range. The gap reflects Manila Water’s more conservative dividend policy and its heavy capital expenditure commitments, with nearly ₱18 billion invested year-to-date, primarily in East Zone infrastructure.

Outlook
Management expects continued margin resilience into the fourth quarter, supported by regulated tariff structures and efficiency programs. Strategic expansion plans, including a potential acquisition in Mexico, could further diversify earnings.

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