Aguas Andinas Margins May Fall After Water Cuts, Banchile Says

Aguas Andinas SA, Chile’s largest publicly traded water utility, may experience margin pressures in the first quarter after a mudslide caused by heavy rain forced the company to cut service to clients in the capital.

Aguas Andinas suspended operations at three plants that provide drinking water for 33 percent of its customers including homes and businesses after a mudslide on the Maipo River yesterday near Santiago made the water too murky to be filtered, Banchile Inversiones said in an e-mailed note.

The rest of Aguas Andinas’ clients will have to be serviced through emergency wells and water tanks, which will increase costs, Banchile said in today’s note.

“We can’t rule out some downward pressure on the stock,” Banchile said. Aguas Andinas series A shares declined for a second day and were down 0.1 percent to 346 pesos at 1 p.m. in Santiago.

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