Revenue for 2022 increased to $40,625,032 from $33,804,841 in 2021, reflecting substantial revenue increases in our retail, services and bulk segments along with a minor revenue increase in our manufacturing segment. Gross profit for 2022 was $14,621,261 (36% of total revenue) as compared to $12,191,363 (36% of total revenue) for 2021. For further discussion of revenue and gross profit see the “Results by Segment” discussion and analysis that follows.
G&A expenses on a consolidated basis remained relatively consistent at $9,792,808 for 2022 as compared to $9,488,790 for 2021.
Other income, net, increased to $717,709 for 2022 as compared to $547,722 for 2021 primarily due to an unrealized gain of $276,000 recorded for the valuation of the put/call options associated with the acquisition of a majority interest in PERC, as compared to an unrealized gain recorded on these options of $162,000 in 2021.
The COVID-19 pandemic had a material adverse impact on our consolidated results of operations for the six months ended June 30, 2022 and we believe the COVID-19 pandemic will continue to adversely impact our results of operations in future periods. See further discussion herein and at “LIQUIDITY AND CAPITAL RESOURCES – Material Commitments, Expenditures and Contingencies – COVID-19.”
Results by Segment
Retail Segment:
The retail segment incurred a loss from operations of ($126,463) for 2022 as compared to a loss from operations of ($1,039,931) for 2021.
Revenue generated by our retail water operations increased to $12,840,003 in 2022 from $11,386,095 in 2021 in part due to an 8% increase in the volume of water sold. The sales volumes for both 2022 and 2021 are significantly below the historical volumes for the retail segment prior to 2020 due to the cessation of tourism on Grand Cayman resulting from border restrictions that lasted from March 2020 through November 2021 in response to the COVID-19 pandemic. The increase in the volume of water sold in 2022 as compared to 2021 resulted from the lifting in November 2021 of travel restrictions to the Cayman Islands for vaccinated individuals, which allowed the resumption of tourism to the Cayman Islands and the reopening of many tourist properties that we serve in Grand Cayman. However, we believe it will be an extended period of time before tourism to the Cayman Islands approaches pre-pandemic levels. Retail revenue also increased due to higher energy costs which increased the energy pass-through component of our water rates and a more favorable rate mix, as much of the volume increase for the quarter was due to higher sales volumes to tourist industry related customers, which pay higher per gallon rates than other retail customers.
Retail segment gross profit increased to $6,667,852 (52% of retail revenue) for 2022 from $5,896,192 (52% of retail revenue) for 2021 due to the revenue increase.
Consistent with prior periods, we record all non-direct G&A expenses in our retail segment and do not allocate any of these non-direct costs to our other three business segments. Retail G&A expenses remained relatively consistent at $6,795,515 for 2022 as compared to $6,689,483 for 2021.
Bulk Segment:
The bulk segment contributed $4,725,316 and $3,736,135 to our income from operations for 2022 and 2021, respectively.
Bulk segment revenue was $15,774,393 and $12,957,941 for 2022 and 2021, respectively. The increase in bulk segment revenue is primarily attributable to an increase in energy costs for CW-Bahamas, which increased the energy pass-through component of CW-Bahamas’ rates and, to a lesser extent, an increase of 4% in the volume of water sold by CW-Bahamas.
Gross profit for our bulk segment was $5,439,691 (34% of bulk revenue) and $4,415,994 (34% of bulk revenue) for 2022 and 2021, respectively. Gross profit in dollars increased in 2022 as compared to 2021 principally due to the revenue increase.
Bulk segment G&A expenses remained relatively consistent at $714,375 for 2022 as compared to $681,359 for 2021.