CaymanNet Business Tuesday
Cayman NetBusiness Tuesday
As CaymanNet News continues to expand, we will bring to you, our readers,greater diversification of information on matters of interestto the Cayman Islands society. In keeping with that spirit andbeginning with this edition, we will be presenting local, regional,and international business news under the caption Cayman Net BusinessTuesday.
Higher Profitfor Consolidated Water
Consolidated Water Co. Ltd., a water servicecompany in Cayman, has announced higher revenue and net incomefor the quarter and year ended December 31, 2001.
For the three months ended December 31,2001, revenue increased 6% to $2.6 Million compared with $2.5Million in the fourth quarter of 2000. Net income rose 44% to$412,098 or $0.10 per diluted share, in the quarter ended December31, 2001, versus $285,990, or $0.07 per diluted share, in theprior-year period. Earnings per share were calculated on 4,008,733diluted shares outstanding in the fourth quarter of 2001, comparedwith 3,945,151 diluted shares outstanding in the year-earlierquarter.
For the year ended December 31, 2001, revenuerose 14% to a record $11.5 Million, compared with the Company'searlier record of $10 Million in the previous year. Net incomeimproved 15% to a record $2,764,572, or $0.69 per diluted share,compared with $2,404,820 or $0.67 per diluted share in the yearended December 31, 2000. The weighted average number of fully-dilutedshares outstanding increased 11% to 3,999,691 in 2001, comparedwith 3,616,271 in 2000, primarily reflecting new shares issuedin conjunction with the Company's public stock offering in May2000. The Company generated cash flow from operations (EBITDA)of $4.1 Million, which was equivalent to $1.04 per diluted sharein 2001, versus EBITDA of $4 Million, which was equivalent to$1.12 per diluted share in the previous year.
"We are very pleased to report that2001 was another record year in every respect for our Company,"commented Rick McTaggart, President of Consolidated Water Co.Ltd. "Revenue increased 14%, net income rose 15% and we recordeda 15.5% return on beginning shareholders' equity. Despite a temporarydownturn in tourism following the horrendous terrorist eventsof September 11th in the United States, growing water demand fromour domestic customers and from the government water agency, alongwith operating efficiencies, allowed us to improve gross profitmargins in our Cayman operations by two full percentage pointsfor the year. This was partly offset by lower profits in Belize,where we experienced a number of equipment breakdowns during 2001.Meanwhile, we recorded a small start-up loss on our new Bahamasoperations."
"Fourth quarter earnings bounced backnicely, rising 44% from prior year levels," continued McTaggart."Although not reaching 2000 levels, American tourists beganreturning to the Cayman Islands late in the year and bookingsfor 2002 indicated continuing improvement.
We believe the proximity of the Cayman Islandsto the United States, just 500 miles south of Miami, will serveus well during the current era of post-terrorism anxiety."
"Looking forward, we currently expect2002 to be another record year for Consolidated Water," notedJeffrey Parker, Chairman and Chief Executive Officer of the company."A modest recovery in tourism, coupled with solid domesticdemand, should see our Cayman market surpass prior levels. Constructioncontinues on a number of condominium projects, including the RitzCarlton Hotel/Condominium/Golf Course development, which is scheduledto open in late 2003. The proposed $400 Million Dart developmentis in what appears to be the final stages of the planning approvalsprocess as well. Meanwhile, we are supplying water to both projectsfor construction and landscaping purposes. Last month, we completedthe purchase of the Hyatt water plant. This purchase and the attendantdemand from the Hyatt Hotel and adjacent Britannia residential/condominiumdevelopment should be immediately profitable and should add approximately$0.07 per share to this year's earnings. More importantly froma longer term perspective, the Hyatt plant's excess capacity relativeto demand from the properties it has supplied, together with itsstorage and pumping capacity, will provide us much needed flexibilityin the operation of our three plants on Grand Cayman and the abilityto meet growing demand well into the future."
C&W WebHosting Services Recognised
Cable and Wireless' international managedweb hosting and interactive web services was recently salutedby a leading analyst firm as being among the top in the web hostingmarketplace.
In its 2002 North American Web Hosting MagicQuadrant, Gartner has positioned Cable & Wireless (NYSE:CWP)and Exodus, its US web hosting business, in the 'Leaders' quadrantbased on the company's 'Ability to Execute' and 'Completenessof Vision'.
Gartner's Magic Quadrant report, a graphicalportrayal of vendor performance in a particular market segment,positions hosting service providers in one of four quadrants:Niche Players, Visionaries, Challengers and Leaders. Accordingto Gartner, leaders are vendors that are performing well today,have a clear vision of market direction and are actively buildingcompetencies to sustain their leadership position in the market.
"Cable & Wireless and its Exodusbusiness are pleased to have been recognized by Gartner in theleader quadrant. The combination of Exodus, Digital Island andCable & Wireless enables us to offer enterprise customersunparalleled network and hosting solutions and the expertise tomeet their business needs," said Bill Austin, chief executiveofficer, Exodus.
Under the brand name of Exodus in the US,Cable & Wireless offers a complete suite of hosting servicesincluding managed hosting, collocation, managed security and managedstorage services. This suite is being completely integrated withDigital Island's established family of content delivery and streamingtechnologies.
According to Gartner, a new evaluation criterionadded to this year's list is financial stability. "With theinvestment pool almost dry, it doesn't matter how good a companyis if it won't have the funds to finish out the year or to reacheventual profitability," the report states.
As of Monday, 1 April, all hosting and contentdelivery services historically offered by Cable & Wireless,Digital Island and Exodus will be managed by one business divisionand marketed in the U.S. as Exodus, a Cable & Wireless Serviceand in the rest of the world as Cable & Wireless. Supportedby Cable & Wireless' powerful global infrastructure and financialstrength, the combined business is uniquely positioned to providemanaged hosting and interactive web services for business customers.
Small businessinitiatives pushed by US President
By Kathy A. Gambrell,
UPI White House Reporter
WASHINGTON, (UPI) -- President George W.Bush told a group of women entrepreneurs Tuesday he wanted toput policies in place that would help the nation's small-businessowners, many of who are women, thrive, but stopped short of sayingthe improving economy has completely pulled out of recession.
"It's really important for people tounderstand, as we're fighting a recession, if small businessescreate two-thirds of the new jobs, it makes sense that any economicrecovery strategy focus on small businesses," Bush said.
He made his comments during the "Women'sEntrepreneurship in the 21st Century Summit" at the RonaldReagan International Trade Center in Washington. The U.S. Departmentof Labor, Public Forum Institute and the Small Business Administrationhosted the event.
The event covered issues including trade,health insurance, taxes, raising capital, developing a healthywork-life balance and retirement planning.
Bush said though there were encouragingeconomic signs, the country had not yet completely recovered.
"We're seeing some encouraging signsof recovery, but I want to tell you something. I'm not a numbers-cruncher,"Bush said. "I'm not one of these bean counters. But I don'tbelieve the economy is strong enough to say that we've recovered."
It was the second day Bush pushed his messageon economic recovery. He praised small business as generatorsof jobs for American workers and pointed to his 10-year, $1.35trillion tax relief package as a reason the nation's economicoutlook was improving.
"It's really important for people tounderstand, as we're fighting a recession, if small businessescreate two-thirds of the new jobs, it makes sense that any economicrecovery strategy focus on small businesses," Bush said.
Analysts have pointed to a fall in the U.S.jobless rate for the second consecutive month to 5.5 percent inFebruary as an indicator that the recession is slowing. Last month,total employment rose by 851,000 to 134.3 million. At the sametime the National Bureau of Economic Research hinted that thedownturn may be over, but like Bush, stopped short of saying therecession was at an end.
Bush said women-owned businesses were growingat twice the rate of other U.S. firms, and were employing some7 million people. He detailed a number of proposals aimed at helpingsmall businesses thrive.
He said he wanted to increase the size ofannual tax deductions for small businesses with gross revenuesunder $10 million in an effort to increase cash flow. He proposedsimplifying the tax code and accounting procedures for small-businessowners. And he said he wanted to alleviate the burden of governmentregulations.
"The SBA has calculated that the hiddencosts of regulations to businesses with fewer than 20 workers.It comes down to $7,000 per worker," he said. "That'sa lot of money, particularly if you're trying to figure out waysto expand your employment base. And this is a drag on our economy."
Real Estatein Manhattan, New York is Rebounding
By Tracie Rozhon,The New York Times
Despite predictions of a real estate recessionin Manhattan after Sept. 11, co-op and condominium sales haverebounded strongly in the last two months, with the number ofsales up and prices gradually rising - in some cases even surpassingthose of a year ago, when the sales market was still hot.
Open houses are full to bursting, and theagents say they are awash with bids and bidding wars. Even thetown house and luxury markets, hit hard by weak Wall Street bonusesat the end of 2001 and a general fear to commit, are startingto move, agents say.
Molly Newman, a broker for the Corcoran Group, said she was shutout on Friday, when her client was told a bid had been acceptedfor a five-room apartment in the East 60's. The apartment, whichhad gone on the market the previous Monday, had 15 bids five dayslater. "I'm totally bowled over," she said. "Themarket didn't start gathering steam until Jan. 15."
Many had said that the combined effectsof the weakening economy and the terrorist attack on the WorldTrade Center last Sept. 11 would lead to a real estate crash.Indeed, in areas close to ground zero, the market has trembled.Elsewhere, however, sales are stronger than expected and brokersreport that even in TriBeCa and Battery Park City, close to thetrade center, sales are finally picking up.
Statisticians, brokers and would-be buyerscredit the rebound to low interest rates and a dearth of greatapartments. They also report that many prospective purchasershave said they are taking their money out of the stock marketand investing in real estate instead.
Jeffrey M. Locker, 46, a Manhattan lawyer,agreed. Mr. Locker, who is looking for a two-bedroom apartmenthimself, said one reason for the flurry of buying is the disenchantmentwith high-flying, high-risk stocks as an investment, driving peopleto invest instead in homes.
"Real estate just seems more stable than the stock marketright now," he said.
Mr. Locker knows firsthand about the hotmarket. "I lost an apartment a week and a half ago,"he said. "Right before that, I thought I had a deal on anotherone. The seller had accepted my offer and the agent said she wouldstop showing it. The next thing I knew, they had gotten an offer$65,000 higher than mine. I matched it, but they never even calledme back."
The size and scope of any surge in the marketdepend on the source compiling the statistics, but an upward trendis clear. For example, the median price of Manhattan co-ops ofall sizes started to rise even in the last quarter of 2001, comparedwith statistics from the same period a year before, accordingto the Real Estate Board of New York. The price per room for three-bedroomapartments even set a record, $266,875, up by 15 percent fromthe year before.
Several Manhattan residential real estatebrokers, in reports issued this week, also trumpeted what theycalled a turnaround.
Paul Purcell, president of Insignia DouglasElliman, the city's largest real estate brokerage firm, reportedthat dollar volume, or total sales, in the first two months of2002 was 42 percent higher than in January and February 2001.One example of today's prices: a one-bedroom at 170 Second Avenue,at 12th Street, sold for $297,000 in 1999; the same apartmentrecently resold for $425,000, Mr. Purcell said.
Jonathan J. Miller, president of MillerSamuel, one of the city's largest appraisal companies, is moreconservative. While other brokers boast of their current sales,Mr. Miller said quietly that the news is good. "I would haveimagined that with the negativity on Wall Street and with 9/11that the real estate market would have suffered," he saidyesterday. "Instead, there has been a noticeable uptick inactivity."
Euro on therise as EU and US get closer
By Chris White,
United Press International
BRUSSELS, (UPI) -- The U.S. ambassador tothe EU, Rockwell Schnabel, believes there are good indicationsthe weak euro could soon see a turnaround, he said in an interviewpublished Friday in a European Parliament house journal.
Citing a recent survey of global fund managers,Schnabel said his view is based not just on the fact that thecurrency is now at an "attractive" level but becauseinternational investors are waking up more generally to the economicreform story in Europe.
"This is sophisticated money from peoplewho are fiduciaries, that say, 'listen, I think the opportunitiesin Europe today are more interesting than they are in the UnitedStates.' OK, granted it is based on valuations in the EU, butit is also to do with...Barcelona [the EU summit] and the wholeprocess of liberalization of the markets and the coming togetherof Europe, the Constitutional Convention (on EU institutionalreform), a number of different things which will mean that Europeis going to grow faster than in the past and therefore it is aninteresting opportunity to invest. I am a believer in that,"he says.
Asked whether such a rise in the euro wouldde facto bring an end to the longstanding U.S. strong dollar policy,Schnabel asserts that a strong euro and strong dollar can happilyco-exist in the future:
"It doesn't have to be a zero sum game.Both could be reserve currencies. You could have two basicallysolid economies and the currency is a reflection of what the economyis doing," he says.
Schnabel suggests there has been littleproblem with euro zone economic policies and says that Europe'scrying need is to "fine tune" the looming economic recoveryby taking reform steps.