CUC Announces First Quarter Results for the Period Ended March 31st, 2014
Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange.
GRAND CAYMAN, Cayman Islands, May 8, 2014 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the First Quarter ended March 31st 2014 (all figures in United States dollars).
Net earnings for the three months ended March 31, 2014 ("First Quarter 2014") totalled $3.4 million, an increase of $0.5 million when compared to $2.9 million for the three months ended March 31, 2013 ("First Quarter 2013"). This increase was driven by higher electricity sales revenues and lower depreciation costs. These items were partially offset by higher consumer service costs and finance charges.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the First Quarter 2014 were $3.3 million, or $0.11 per Class A Ordinary Share, an increase of $0.5 million from the $2.8 million, or $0.10 per Class A Ordinary Share for the First Quarter 2013.
Sales for the First Quarter 2014 totalled 130.7 million kilo-watt hours ("kWh"), an increase of 5.2 million kWh, or 4%, in comparison to 125.5 million kWh for the First Quarter 2013. First Quarter 2014 kWh sales were positively impacted by growth in customer numbers and warm weather conditions that affected customer air-conditioning load more significantly when compared to the same period last year. The average monthly temperature for the First Quarter 2014 was 80.0 degrees Fahrenheit as compared to average monthly temperature of 79.3 degrees for First Quarter 2013.
The total number of customers at the end of the First Quarter 2014 was 27,438 customers, a 1.3% increase when compared to 27,086 customers at the end of the First Quarter 2013.
President and CEO, Mr. Richard Hew, says, "The Company continues to invest in the infrastructure which is required to meet current and future demand as needed, while also working to control its operating expenditures. CUC is committed to ensuring that its customers are provided with a safe and reliable electricity service at least cost. "
Capital Expenditures totaled $6.5 million and reliability of service as measured by the average service availability index, was 99.98% for the First Quarter 2014.
The Electricity Regulatory Authority (ERA) cancelled the solicitation process for firm generation in July 2013. This process had been initiated by a Certificate of Need (CON) issued by CUC in November 2011. The CON was driven primarily by the upcoming retirement of some of the Company's generating units due to begin this year.
The ERA has since restarted the process and announced the listing of qualified bidders resulting from its solicitation for Statements of Qualifications. Bids are due in mid-May and an announcement of the winning bidder is expected to be made in July 2014 for 36 MW of firm capacity to be on-line by June 2016.
In the meantime, the ERA and CUC have agreed to a temporary generation plan which will allow CUC to meet the expected reserve margin requirements for the peak periods, and until the firm capacity needs can be met.
CUC has secured the rental supply of approximately 7.5 MW of mobile generation for this summer. This will complement existing generation, satisfy ongoing customer needs and help to ensure a continued reliable supply of power to consumers.
During the quarter under review the Company also initiated a technical interconnection study for one of the two proposed large-scale solar energy projects. CUC anticipates that by the end of 2015 it will connect 13 MW of renewable energy capacity from developers who will finance, construct, own and operate these facilities.
Mr. Hew added, "CUC believes there are economic and environmental benefits from engaging renewable energy sources to displace some of the diesel fuel that our generators presently consume. Wind and solar are non-firm power and will need to be supported by firm power sources such as diesel generation."
CUC's First Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended March 31st 2014 are attached to this release and incorporated by reference and can be accessed by clicking the link at the end of this release.
The MD&A section of this report contains a discussion of CUC's unaudited 2014 First Quarter results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and First Quarter MD&A can be accessed at www.cuc-cayman.com (Investor Relations/Press Releases) and at www.sedar.com.
CUC provides electricity to Grand Cayman, Cayman Islands, under an Electricity Generation Licence expiring in 2029 and an exclusive Electricity Transmission and Distribution Licence expiring in 2028. Further information is available at www.cuc-cayman.com.
Certain statements in the MD&A, other than statements of historical fact, are forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to the Company and its operations, including its strategy and financial performance and condition. Forward looking statements include statements that are predictive in nature, depend upon future events or conditions, or include words such as "expects", "anticipates", "plan", "believes", "estimates", "intends", "targets", "projects", "forecasts", "schedule", or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could". Forward looking statements are based on underlying assumptions and management's beliefs, estimates and opinions, and are subject to inherent risks and uncertainties surrounding future expectations generally that may cause actual results to vary from plans, targets and estimates. Some of the important risks and uncertainties that could affect forward looking statements are described in the MD&A in the section labeled "Business Risks" and include but are not limited to operational, general economic, market and business conditions, regulatory developments and weather. CUC cautions readers that actual results may vary significantly from those expected should certain risks or uncertainties materialize, or should underlying assumptions prove incorrect. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.
SOURCE Caribbean Utilities Company, Ltd.
Contact: Letitia Lawrence
Vice President Finance and Chief Financial Officer
Phone: (345) 914-1124