Cascal

What is it?

A NYSE-listed water and wastewater service provider, serving 4.6 million people in seven countries around the world. Biwater holds a 59% stake.

What has it done?

2009 was the year in which equity investors finally bought into the Cascal story. The stock outperformed the major indices to end the year 35% higher than where it started, while the company’s P&L took a turn for the better, as it called in some key payments relating to past activities in Belize and Panama, thus removing a significant management distraction. Cascal also negotiated important rate increases at its UK and Chilean regulated subsidiaries, while furthering its ambitions in the Caribbean.

What makes it special?

• Cascal’s ambitions in the desalination market took a considerable leap forward in December, when it acquired three Caribbean businesses from Veolia Water, serving municipalities and resorts on the islands of Antigua, Curaçao and Bonaire. The deal gives Cascal considerable potential to broaden its footprint by leveraging further opportunities in the region.

• Cascal successfully steered its UK subsidiary, Bournemouth & West Hampshire Water, through a tough price review, whilst maintaining high operational standards - a fact recognised formally by both the UK government and the economic regulator.

• The company has continued to reduce its exposure to the sterling/dollar exchange rate by diversifying its revenue base away from the UK. This has not come at the expense of profitability - Cascal continues to generate healthy EBITDA margins relative to the rest of its peer-group.