Peru's Sedapal sees profits drop through Q3

Lima's state water company Sedapal executed 56% of its investment program through the first three quarters, while earnings plummeted 66%.

The company, which operates three water treatment plants and buys water from Chillón river concessionaire Consorcio Agua Azul, invested 206mn soles (US$60mn) of its 367mn-sol budget through September 30, according to its earnings report filed with securities regulator SMV.

Sedapal financed 66.8mn soles from cash flow, 128mn soles came from the housing and construction ministry and 10.9mn soles from international loans. Capex was allocated to the Pachacútec I, Lima Norte II, Esquema Cajamarquilla, Nievería and Cerro Camote coverage expansion projects, the company said.

The utility processed 537.7Mm3 of water in the period, compared with 539.1Mm3 a year earlier, 72% at its La Atarjea plant. The company said it billed 387.3Mm3 in the nine months, up from 378.1Mm3 a year earlier. About 700,000 of Lima's 9mn inhabitants lack access to potable water and 1mn lack sewerage services, according to state water regulator Sunass.

Sedapal's profits plunged to 11.4mn soles through September from 33.3mn soles a year ago. Revenue rose 7.8% to 1.30bn soles from 1.21bn soles.

Peru's President Pedro Pablo Kuczynski, who took office July 28 pledging to provide connections for water services for 100% of the population by 2023, appointed former housing and labor minister Rudecindo Vega to head Sedapal in September, replacing Roberto Urrunaga.

The previous government canceled plans last year to sell a 50% stake in Sedapal to improve operational efficiency, due to a lack of political backing. The company has been criticized by industrial groups such as infrastructure lobbyists AFIN, which alleges the state firm is unable to finance its 9bn-sol (US$3bn) portfolio of potable water and sewerage projects.

The government has eliminated bureaucratic obstacles for 170 potable water and sewerage projects, Kuczynski said earlier this month.