CUC Announces Second Quarter Results for the Period Ended June 30, 2014
Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange.
GRAND CAYMAN, Cayman Islands, Aug. 1, 2014 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the Second Quarter ended June 30, 2014 (all figures in United States dollars).
Net earnings for the three months ended June 30, 2014 ("Second Quarter 2014") totalled $5.7 million, comparable to the net earnings for the three months ended June 30, 2013 ("Second Quarter 2013"). Higher electricity sales revenues in the Second Quarter 2014 were offset primarily by higher consumer service and maintenance costs.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the Second Quarter 2014 were $5.6 million, or $0.20 per Class A Ordinary Share, comparable to earnings on Class A Ordinary Shares and earnings per Class A Ordinary Share for the Second Quarter 2013.
Net earnings for the six months ended June 30, 2014 totalled $9.2 million, an increase of $0.6 million when compared to $8.6 million for the six months ended June 30, 2013. This increase was due primarily to higher electricity sales revenues and lower depreciation costs. These items were partially offset by higher consumer service and finance charges.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the six months ended June 30, 2014 were $9.0 million, or $0.31 per Class A Ordinary Share, an increase of $0.6 million from the $8.4 million, or $0.29 per Class A Ordinary Share for the six months ended June 30, 2013.
Sales for the Second Quarter 2014 totalled 144.5 million kilowatt-hours ("kWh"), an increase of 0.2 million kWh when compared to 144.3 million kWh for the Second Quarter 2013. Sales for the six months ended June 30, 2014 totaled 275.2 million kWh, an increase of 5.5 million kWh in comparison to 269.7 million kWh for the six months ended June 30, 2013. Sales for the Second Quarter 2014 and the six months ended June 30, 2014 were positively impacted by warmer weather conditions and an increased number of customers when compared to the same periods last year.
President and CEO, Mr. Richard Hew, says, "The Company continues to position itself to meet the current and future energy needs of Grand Cayman by making the necessary investment in infrastructure while remaining focused on controlling our operating expenditures and providing our customers with a safe and reliable electricity service."
Capital expenditures totaled $7.5 million and the Company's reliability of service as measured by the Average Service Availability Index was recorded at 99.96% for the Second Quarter 2014.
In June 2014, following review and approval by the Electricity Regulatory Authority ("ERA"), the Company increased its base rates by 1.5% as allowed under the rate cap and adjustment mechanism ("RCAM"). During the period under review, an independent, comprehensive, allocated Cost of Service Survey ("COSS") was also completed and submitted to the ERA for review. As a result of the COSS, the Company adjusted its base rates for a 1% reduction to the residential customer category, a 2.8% increase to the general commercial customer category and a 1.1% increase to the large commercial customer category. Altogether, these adjustments equate to the 1.5% RCAM base rate increase.
The ERA cancelled the previous 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.
Following the issuance of a new CON in October 2013, the ERA has since restarted the process and bids were submitted by qualified bidders, including CUC, in May 2014. A decision is expected imminently as the time given by the ERA for the announcement of the winning bidder was late July.
During the Second Quarter 2014, CUC secured the supply of 7.5 megawatts ("MW") of temporary mobile generation following the retirement of 17.5 MW of generation. This temporary generation will complement existing generation and help to ensure continuity of supply until the installation of the firm capacity.
During the period under review the Company embarked on a number of initiatives which will continue to enhance the level of service it provides to its customers by offering additional off-site bill payment locations with convenient opening hours, and by improving its Pay-By-Telephone service. More resources were also added to the Company's Customer Contact Center to improve e-mail and telephone inquiry response times.
The Advanced Metering Infrastructure ("AMI") project is slated for substantial completion by the end of 2014. To date over 8,000 customers have the AMI meters which will assist them with regularly managing their energy usage. The project will provide real-time consumption information and bring efficiencies to meter reading as well as other services. AMI will also enable a Pay-As-You-Go payment option which will help customers to monitor and control their electricity consumption.
CUC's Second Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended June 30, 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 Second Quarter results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and Second 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