Watlington Waterworks Limited Releases 2014 Results

HAMILTON, Bermuda - 11 May, 2015 – Watlington Waterworks Ltd. (the “Company”; Ticker: WWW.BH) today released the financial results for the fiscal year end 31 December, 2014. In a letter to shareholders the Company stated:

“There was an increase in revenues for the year 2014 compared to the previous year. This was mainly due to an increase in the number of customers most of whom were located in the West End. Changes in rainfall distribution also contributed; it was another year of above average rain which was more intense over shorter periods, leading to higher demand for our products and services during longer intervals between rains.

The Company made its largest investment in a single year for property, plant and equipment since building the sea water reverse osmosis plant 20 years ago. The investment was for the new brackish water reverse osmosis plant, redevelopment at “32 Parsons Lane” to build a new bottling plant and warehouse, and continuing the West End pipeline expansion.

The new brackish water reverse osmosis plant is more energy efficient than the old treatment plant it replaced. As a consequence plant operational costs decreased. This led to an improvement in the gross profit margin and to overall stronger net earnings for the Company.

The Board has been conscious of the steadily increasing depreciation expense as the Company continues to annually re-invest most of the cash generated from operations to finance infrastructure projects. The concern is that present shareholders will not be sharing in the benefit of present and ongoing investment to the extent future shareholders will benefit after the investment cost has been recouped through depreciation. The Board is sensitive to balancing the need to continue infrastructure investing with present shareholder’s interests. As a result the Board has revised the dividend policy to benefit shareholders more equitably by moving from basing dividends on net earnings to basing dividends on net cash generated. This will be applied to the year 2014 retrospectively to be included with the June 2015 dividend payment.

Shareholders will have noted that the Company continues to carry a substantial cash/investment reserve. This has been earmarked for land and/or asset acquisition together with construction of a future reservoir in the West End. The current vision for future West End expansion requires the Company to purchase land and build another reservoir within the next few years. The cash/investment reserve is to facilitate future development and financing for this infrastructure strengthening.

The year 2015 has continued the improving trend seen in 2014, due partially to increasing numbers of customers, referred to above, and also in large part due to cost savings more than revenue growth. There is not yet sufficient confidence in the trend to attribute part of it to an overall improvement in our national economic condition.

There has been over 20 million dollars invested in replacement or new infrastructure since the year 2000. The quality of both the piped Watlington Water and Bottled Water are extremely high. The Watlington Water quality has never been higher due to the new brackish water reverse osmosis plant. The bottling plant is currently being upgraded with new production equipment that will lead to more efficient bottling, and more environmentally friendly containers are being introduced.

The company’s waters are continuously monitored during production, tested daily by Company staff, weekly by the Bermuda Government’s Health Department, and annually Bottled Water and sea water reverse osmosis product water are tested by a recognized laboratory in the U.S. The new brackish water reverse osmosis plant product water will also be subject to annual overseas testing starting this year. The Company’s products have consistently met or exceeded internationally recognized drinking water standards. Producing high quality water continues to be one of the Company’s key strategic priorities. This is supported by the ongoing inward investment aimed at improving operational efficiencies, and maintaining or upgrading the high standards expected for public drinking water supply.

The Board and Management remains committed to continuously improving the services provided by Watlington Waterworks Limited and its subsidiaries to Bermuda.”

For further information contact:

Watlington Waterworks Ltd.,

Attn: Mr. Allan Rance  Tel: (441) 236-1288