Smooth Flow For Water Company

Clinton-based Connecticut Water Service posted an 11 percent gain in first-quarter profits, mostly due to the January acquisition of the Eastern Operations of Birmingham Utilities.

Net profits totaled $1.7 million, or 20 cents per share, in the quarter up from nearly $1.5 million, or 18 cents per share in the first quarter of 2007.

The company’s core business segment, Water Activities, showed year-over-year net income growth of more than 17 percent for the quarter, earning $1.5 million, or 18 cents per share, up from $1.3 million, or 16 cents per share.

About $400,000 of the revenue gain came from the purchase of Birmingham’s Easter Operations. In addition, the company said it was able to reduce some of its key operating costs during the quarter.

Growth By Acquisition

Connecticut Water also reported continued growth in net income from its services and rentals segment, which came in with a $190,000 profit, or 2 cents per share, up from $142,000, or a tad above a penny-and-a-half per share. The earnings gain in the services and rentals segment is largely due to the service contracts acquired from Birmingham Utilities’ H2O Services Inc. in January 2008.

Also acquired were the Avery Heights Homeowners Association water system in South Windsor a year ago and the Hilldale Park system in Plainfield in September 2007.

As expected, there was no income from the company’s real estate segment in the first quarter of 2008.

New Rates

“Earnings in Q1 reaffirm our strategy of focusing on the water activities segment,” Chairman, President and Chief Executive Officer Eric Thornburg said.

“We look forward to continued growth in Q2 as we begin to recover $15.5 million in infrastructure investment that was made in 2007 to better serve our customers.”

New rates reflecting that investment and financing costs related to the 2007/ 2008 rate phase-in went into effect on April 1.

Connecticut Water provides drinking water to over 85,000 customers, or nearly 300,000 people, in 54 towns throughout Connecticut.