CUC Announces Fourth Quarter and Twelve Month Results for the Period Ended December 31, 2010

GRAND CAYMAN, Cayman Islands, Feb. 14 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC" or the "Company") announced today its unaudited results for the fourth quarter and twelve months ended December 31, 2010 (all figures in United States dollars).

Net earnings for the three months ended December 31, 2010 were $4.7 million, representing a decrease of 20% or $1.2 million from net earnings of $5.9 million for the three months ended December 31, 2009. This decrease in earnings is principally attributable to 10% lower sales during the period compared to the fourth quarter of 2009 due to significantly cooler temperatures during the fourth quarter of 2010 and particularly during the month of December.

Net earnings for the twelve months ended December 31, 2010 were $19.9 million, representing a 1% or $0.1 million decrease from net earnings of $20.0 million for the twelve months ended December 31, 2009. The decrease in earnings is due to 1% lower sales during the one year period compared with 2009, increased depreciation expense and an increase in finance charges.  These increases were partially offset by lower maintenance, general and administration and transmission and distribution costs in 2010.

Operating income declined 13%, or $0.9 million, to $6.1 million for the three months ended December 31, 2010 from $7.0 million for the three months ended December 31, 2009.  Despite lower kWh sales, operating income increased 8%, or $1.9 million, to $25.9 million for the twelve months ended December 31, 2010 from $24.0 million for the twelve months ended December 31, 2009, reflecting overall improved efficiencies.

After adjustment for dividends on Class B Preference Shares, earnings on Class A Ordinary Shares for the fourth quarter of 2010 were $4.0 million, or $0.15 per Class A Ordinary Share, compared to $5.5 million, or $0.20 per Class A Ordinary Share for the fourth quarter of 2009.  After adjustment for dividends on Class B Preference Shares, earnings on Class A Ordinary Shares for 2010 were $18.9 million, or $0.67 per Class A Ordinary Share, as compared to $18.8 million or $0.67 per Class A Ordinary Share in 2009.

Richard Hew, President and Chief Executive Officer of the Company stated, "Apart from the unusually cool weather in December, which caused significantly lower than expected sales, year-end results were as expected. The Company continued its response to the recessionary economic environment by trimming capital and operating expenditures to maintain financial stability while meeting the obligation of safe and reliable service to our customers."

Higher fuel prices drove operating revenues up 8%, or $3.5 million, to $47.4 million for the fourth quarter 2010 from $43.9 million for the fourth quarter 2009.  Operating revenues increased 13%, or $21.3 million, to $180.1 million for the twelve months ended December 31, 2010 from $158.8 million for the twelve months ended December 31, 2009.  The higher fuel factor revenues in 2010 as a result of the fuel price increases were partially offset by a 10%, or $1.7 million, decrease in electricity sales revenue in fourth quarter 2010 which was driven by cooler weather.  Average fuel costs, which are passed on to customers without markup, rose from $2.77 per Imperial Gallon ("IG") in 2009 to $3.45 per IG in 2010 with the fourth quarter 2010 average rising to $3.85 per IG.

The Company continued to invest in infrastructure and equipment during 2010 although at a lower level than in 2009 when capital expenditures of over $19.0 million were made on generation expansion.   Capital expenditures for 2010 were focused on transmission and distribution upgrades and generation plant replacements and upgrades.  For the fourth quarter of 2010, capital expenditures were $5.5 million, down $1.0 million or 15% from $6.5 million for the fourth quarter of 2009.  For the one year period, capital expenditures were $21.5 million, down $21.2 million or 50% from $42.7 million in 2009.

Mr. Hew added that, "Reliability, measured by the Average System Availability Index, was 99.966% and exceeded 2009 results. Despite economic challenges on the island, we see safe and reliable electricity supply as critical in supporting the established financial services and tourism industries as well as in attracting new development."

CUC's Fourth Quarter Report for the period ended December 31, 2010 can be accessed by clicking the link below:

http://files.newswire.ca/520/Q4_2010_Report.pdf

This report contains a detailed discussion of CUC's unaudited fourth quarter financial results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and Fourth Quarter Report 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.

Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange under the trading symbol "CUP.U".

CUC includes forward-looking statements in this material.  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 for the twelve month period ended December 31, 2009, in the section labeled "Business Risks" and  include but are not limited to 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.

For further information:

Contact: Letitia Lawrence
  Vice President Finance and Chief Financial Officer  
Phone: (345) 914-1124
E-Mail: llawrence@cuc.ky


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