# Consolidated Water's Q3 profit fell by more than half while $150 million of Hawaii work waits on permits - Published: 2026-11-10 - Author: [CFO Drive](https://cfodrive.com/author/cfodrive-com.md) - Topics: [News](https://cfodrive.com/news.md) - About: [Consolidated Water Co. Ltd.](https://cwco.com/) - Based on: [Consolidated Water Reports Third Quarter 2026 Results](https://www.globenewswire.com/news-release/2026/11/09/3399057/0/en/consolidated-water-reports-third-quarter-2026-results.html), GlobeNewswire, 2026-11-09 - Based on: [Consolidated Water Co. Ltd. quarterly report on Form 10-Q for the period ended September 30, 2026](https://www.sec.gov/Archives/edgar/data/928340/000110465926124560/cwco-20260930x10q.htm), U.S. Securities and Exchange Commission, 2026-11-09 - Source: https://cfodrive.com/news/consolidated-water-q3-2026-results-hawaii-backlog/ - Publication: CFO Drive - Publisher: Connectively (Terkel, Inc.) - Editorial policy: https://cfodrive.com/editorial-policy/ Consolidated Water's Q3 2026 results, published November 9, show revenue down 11.9% to $30.9 million and continuing-operations profit down from $5.6 million to $2.4 million. The Cayman Islands water company (Nasdaq: CWCO) says its largest contract, more than $150 million of Hawaii desalination work, will not reach revenue until construction starts in 2027. ## Key points - Third-quarter revenue was $30.9 million, against $35.1 million a year earlier, as services and manufacturing revenue fell and retail and bulk water sales rose. - Net income from continuing operations attributable to stockholders was $2.4 million, or $0.15 per diluted share, compared with $5.6 million, or $0.34, in the third quarter of 2025. - Gross margin narrowed to 31.8% of revenue from 36.9%, as gross profit fell to $9.8 million from $12.9 million. - The company held $129.2 million of cash and cash equivalents and $145.1 million of working capital on September 30, 2026. - Consolidated Water puts its Hawaii desalination project at more than $150 million of contracted backlog not yet recognized as revenue, with construction expected in the first half of 2027, subject to permits. ## What do Consolidated Water's Q3 2026 results show? Consolidated Water's Q3 2026 results show its regulated water sales growing while its project businesses shrink. Consolidated Water Co. Ltd. sells desalinated water in Grand Cayman and The Bahamas and designs, builds, runs and equips water plants in the United States. | Q3, $ millions | 2026 | 2025 | Change | | --- | --- | --- | --- | | Retail water | 8.2 | 7.8 | +5.7% | | Bulk water | 10.1 | 8.4 | +20.8% | | Services | 9.8 | 14.3 | -31.7% | | Manufacturing | 2.8 | 4.7 | -39.7% | | Total revenue | 30.9 | 35.1 | -11.9% | | Gross margin | 31.8% | 36.9% | | | Diluted EPS, continuing operations | $0.15 | $0.34 | | Retail water revenue in Grand Cayman rose 5.7% to $8.2 million and bulk revenue rose 20.8% to $10.1 million, which the company credits mainly to higher energy pass-through charges. The declines came from project work. Services revenue fell 31.7% to $9.8 million: construction revenue dropped to $3.5 million from $6.4 million, and operations and maintenance revenue slipped to $6.1 million from $7.7 million after contracts with three California customers expired in the first quarter. Manufacturing revenue fell 39.7% to $2.8 million, and the company still expects full-year manufacturing revenue below 2025. For the first nine months, revenue was $93.8 million, down 8.5%, and continuing-operations profit attributable to stockholders was $10.2 million, against $15.7 million a year earlier. ## Why is $150 million of Hawaii work not in revenue yet? The Hawaii contract cannot turn into revenue until construction starts, and construction is waiting on permits. Consolidated Water's subsidiary Kalaeloa Desalco signed the contract with the Honolulu Board of Water Supply in June 2023 to build and operate a 1.7 million gallons per day seawater reverse osmosis plant on Oahu, and the company's [quarterly report](https://www.sec.gov/Archives/edgar/data/928340/000110465926124560/cwco-20260930x10q.htm) says permit delays since 2025 have deferred project milestones and the start of construction. > Design and construction of the Hawaii project represents more than $150 million of contracted backlog which has not yet been recognized as revenue. — Rick McTaggart, CEO, Consolidated Water In July the water board released about $6 million so the company could order long-lead equipment, and the company says recent state historic preservation and health department approvals let it pursue the remaining permits. It expects to start construction in the first half of 2027 and, once the plant is commissioned, to run it for 20 years, with two five-year extensions at the client's option. The filing adds the risk the release leaves implicit. If the board's schedule extensions fall short of the delay, the [10-Q](https://www.sec.gov/Archives/edgar/data/928340/000110465926124560/cwco-20260930x10q.htm) says, it could assess liquidated damages, withhold milestone payments or terminate the contract. ## How did Cayman Water's new license affect margins? The new license kept Cayman Water's monopoly but cut its prices. The 25-year retail license that took effect August 1, 2026 preserves the exclusive right to produce and sell drinking water in its Grand Cayman service area, lowers base rates for customers and keeps an annual rate adjustment that the regulator must verify and approve. > Although lower retail rates reduced quarterly retail gross profit, higher energy pass-through charges, a 1% increase in water sales volume, and an increased rate for a major commercial customer increased retail revenue. — Rick McTaggart, CEO, Consolidated Water In bulk water, the company says gross profit rose but higher diesel and maintenance costs lowered the margin. ## What new work has Consolidated Water won? The company has won two sizable contracts since July, and says more bids are pending. A Florida east coast municipality placed about $10.1 million of purchase orders for nanofiltration membrane equipment and horizontal cartridge filters, due for delivery in November 2027, which the company calls its largest municipal orders of that kind. On October 12 it announced that Pismo Beach, California, had picked it for an approximately $39.8 million design-build deal on the city's Central Coast Blue water purification plant, with construction expected to start in spring 2027. The [10-Q](https://www.sec.gov/Archives/edgar/data/928340/000110465926124560/cwco-20260930x10q.htm) adds that the fixed-price contract requires substantial completion within 703 calendar days and carries liquidated damages of $2,500 a day, capped at 5% of the price. The company also says it has bid on about $10 million of manufacturing projects due to be awarded this quarter and is tracking about $45 million of Florida municipal projects it expects to go out for bid within six months. ## What does the release leave out? The release gives no 2026 or 2027 revenue or earnings guidance, no estimate of what the Hawaii plant will add each year once it is running, and no date for the remaining Hawaii permits. It does not say what the new Cayman license does to retail revenue over a full year, and it makes no comparison with analysts' estimates; management takes questions on a conference call at 11:00 a.m. Eastern time on November 10. It names delinquent receivables in The Bahamas only among its risk factors. The [quarterly report](https://www.sec.gov/Archives/edgar/data/928340/000110465926124560/cwco-20260930x10q.htm) puts the amount owed by the Water and Sewerage Corporation of The Bahamas at $23.5 million on September 30, up from $20.7 million at the end of 2025, with about 64% of it delinquent. The company has booked no material allowance for credit losses, citing a history of eventual full payment and Moody's upgrade of The Bahamas to Ba3 in April. ## What should CFOs take from Consolidated Water's quarter? Our analysis: the quarter shows how a large contracted backlog can sit off the income statement for years when its start depends on someone else's approvals, while the end of smaller contracts hits results now. Finance leaders with a few large public-sector customers will recognize both pressures, the timing of a contract's start and the pace at which a government client pays, from [the risk of client concentration](https://cfodrive.com/insight/client-concentration-is-the-risk-most-small-companies-never-put-on-paper/) and [a contract that was delivered and left unpaid](https://cfodrive.com/insight/the-contract-that-was-signed-delivered-and-unpaid-for-eleven-weeks/). A strong cash position, here $129.2 million, is what lets a company carry that wait. ## Frequently asked questions ### What was Consolidated Water's revenue in Q3 2026? Revenue was $30.9 million for the quarter ended September 30, 2026, down 11.9% from $35.1 million a year earlier, according to the company's November 9 release. ### How much did Consolidated Water earn per share in Q3 2026? Diluted earnings from continuing operations were $0.15 per share, against $0.34 a year earlier. Including discontinued operations, diluted earnings were $0.14 per share. ### When will construction of the Hawaii desalination plant start? Consolidated Water expects construction to begin between January and June 2027, provided the outstanding permits and approvals come through. The Honolulu Board of Water Supply has granted schedule extensions to reflect the permitting process. ### What is the Pismo Beach Central Coast Blue contract worth? The design-build agreement with the City of Pismo Beach is worth about $39.8 million. Construction is expected to begin in spring 2027, with design, permitting, construction and commissioning expected to take about 24 months in all. ## Sources - [Press release from Consolidated Water via GlobeNewswire, November 9, 2026: third quarter 2026 results](https://www.globenewswire.com/news-release/2026/11/09/3399057/0/en/consolidated-water-reports-third-quarter-2026-results.html) - [Consolidated Water quarterly report on Form 10-Q for the period ended September 30, 2026, filed with the SEC on November 9, 2026](https://www.sec.gov/Archives/edgar/data/928340/000110465926124560/cwco-20260930x10q.htm)