CUC's Fourth Quarter Report for the period ended December 31, 2011 can be accessed by clicking the link below.
Caribbean Utilities Company, Ltd. is listed for trading in United States
dollars on the Toronto Stock Exchange under the trading symbol "CUP.U".
GRAND CAYMAN, Cayman Islands, Feb. 9, 2012 /CNW/ - Caribbean Utilities
Company, Ltd. ("CUC" or the "Company") announced today its unaudited
results for the fourth quarter and twelve months ended December 31,
2011 (all figures in United States dollars).
Net earnings for the three months ended December 31, 2011 ("Fourth
Quarter 2011") were $5.1 million. This represents an increase of 9%, or
$0.4 million, from net earnings of $4.7 million for the three months
ended December 31, 2010 ("Fourth Quarter 2010"). This increase in
earnings is the result of an increase in electricity sales and a
decrease in maintenance and transmission and distribution expenses as
the Company continued to focus on reliability driven capital upgrade
projects during the period. Electricity sales were positively impacted
by warmer weather conditions during the Fourth Quarter 2011 versus the
same period last year. Overall, kilowatt- hour (kWh) sales for 2011
were flat at 554.0 million.
Net earnings for the twelve months ended December 31, 2011 were $20.4
million, representing a 3% or $0.5 million increase from net earnings
of $19.9 million for the twelve months ended December 31, 2010. With
flat kWh sales, this increase in earnings was driven by an increase in
other income and lower financing and maintenance charges.
Higher fuel prices and 4% kWh sales growth drove operating revenues up
by 22%, or $10.3 million, to $57.7 million for the Fourth Quarter 2011
as compared to $47.4 million for the Fourth Quarter 2010. Operating
revenues increased 21%, or $38.0 million, to $218.1 million for the
twelve months ended December 31, 2011 from $180.1 million for the
twelve months ended December 31, 2010. The increase in operating
revenues was a result of higher fuel factor revenues in 2011 due to an
increase in fuel prices. The average Fuel Cost Charge rate per kWh
charged to consumers for the twelve months ended December 31, 2011 was
$0.27, a 35% increase from $0.20 per kWh for the twelve months ended
December 31, 2010. Actual fuel and lubricating costs are passed on to
consumers without mark-up.
After the adjustment for dividends on Class B Preference Shares,
earnings per Class A Ordinary Share for the Fourth Quarter 2011 of
$0.15 was comparable to earnings per Class A Ordinary Share for the
Fourth Quarter 2010. After the adjustment for dividends on Class B
Preference Shares, earnings per Class A Ordinary Share for 2011 was
$0.68, an increase of 1% over earnings per Class A Ordinary Share in
2010 of $0.67.
Richard Hew, President and Chief Executive Officer of the Company
stated, "The year under review has been a challenging one for CUC and
the Cayman Islands. However, the Company was able to finish the year
on a positive note with some earnings growth. This is a direct result
of steps taken to control the Company's discretionary operational
expenditures while maintaining our focus on safety, efficiency and
service reliability. We anticipate that this focus will remain as the
economy slowly emerges from this recession."
Capital expenditures for the Fourth Quarter 2011 were $10.8 million, a
$5.3 million, or 96% increase from $5.5 million in capital expenditures
for the Fourth Quarter 2010. Capital expenditures for the twelve
months ended December 31, 2011 were $40.6 million, a $19.2 million, or
90% increase from $21.4 million in capital expenditures for 2010.
Excluding capital expenditures related to repair of units damaged
earlier in the year, for which the cost was covered by insurance
proceeds (net of deductible), capital expenditure initiatives for 2011
totaled $34.0 million and included the initiation of the Advanced
Metering Infrastructure (AMI) project roll-out and completion of the
Eastern Transmission Loop. By the second quarter of 2012 the AMI
project will bring efficiencies in meter reading and services such as
disconnects and reconnects directly from CUC's offices, provide near
real-time electricity consumption information and a 'pay as you go'
payment option to aid consumers in monitoring and controlling their
The Eastern Transmission Loop project will also bring customer benefits
through an increase in the reliability and operational flexibility of
the Transmission and Distribution System serving all areas of the
island from South Sound, east to the districts of East End and North
In November 2011 CUC issued a certificate of need to the Electricity
Regulatory Authority (ERA) for 18 megawatts (MW) of new generating
capacity to be installed in 2014 and for an additional 18 MW of
generating capacity to be installed in either 2015 or 2016 contingent
on growth over the next two years. The primary driver for the new
generating capacity in 2014 is the upcoming retirements of several of
CUC's generating units which are reaching the end of their useful
lives. As a result of CUC expressing its need for replacement
capacity, the ERA will be conducting a competitive solicitation in 2012
in accordance with CUC's licences which will allow all interested and
qualified parties, including CUC, to submit bids to fill the Company's
firm capacity requirement.
The Company also recently conducted and completed a competitive bidding
process to fill 13 MW of non-firm renewable energy capacity. There are
currently no viable renewable energy sources in Grand Cayman that meet
CUC's reliability requirements for firm capacity, however, CUC expects
that there are third parties that can build and maintain renewable
energy plants on the island and sell energy to CUC at a competitive
price to diesel.
Mr. Hew added that, "CUC welcomes the competitive bidding process which
is being conducted by the ERA for replacement of the retiring firm
capacity and also looks forward to completing the bid evaluations which
will move the island closer to having medium-to-large scale renewable
energy sources. With the Government projecting modest Gross Domestic
Product (GDP) growth for 2011, which impacts the rate outlook for the
Company, we remain cautiously optimistic about future growth in the
economy and a resumption of growth in electricity demand and believe
the Company is well positioned to continue to serve the island in an
efficient and reliable manner at least cost, while providing a fair
return to our shareholders."
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.
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 Management's Discussion and Analysis for the twelve month period ended December 31, 2010, 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.
PDF with caption: "CUC's Fourth Quarter Report for the period ended December 31, 2011 can be accessed by clicking the link below.". PDF available at: http://stream1.newswire.ca/media/2012/02/09/20120209_C3082_DOC_EN_9981.pdf
SOURCE Caribbean Utilities Company, Ltd.
For further information:
Vice President Finance and Chief Financial Officer
Phone: (345) 914-1124