Caribbean Utilities Company, Ltd. 2016 Annual Report (CNW Group/Caribbean Utilities Company, Ltd.)
Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange
GRAND CAYMAN, Cayman Islands, Feb. 16, 2017 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its audited results for the twelve-month period ended December 31, 2016 (all figures in United States dollars).
Net earnings for the year ended December 31, 2016 ("Fiscal 2016") were $25.2 million, a $2.4 million increase from net earnings of $22.8 million for the year ended December 31, 2015 ("Fiscal 2015"). This increase is attributable to a 4% increase in kilowatt-hour ("kWh") sales, 0.9% and 0.1% base rate increases effective June 1, 2015 and June 1, 2016 respectively, lower consumer services expenses and lower finance charges. These items were partially offset by higher depreciation costs.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Fiscal 2016 were $24.3 million, or $0.75 per Class A Ordinary Share as compared to $21.9 million, or $0.71 per Class A Ordinary Share for Fiscal 2015. The Company successfully completed a Rights Offering (the "Offering") on May 4, 2015. The Offering raised gross proceeds of $31,563,639 through the issue of 2,930,700 Class A Ordinary Shares. The weighted average number of Class A Ordinary Shares used to calculate the earnings per Class A Ordinary Share was impacted by the shares issued through the Offering. The full impact of the Rights Offering on the weighted average number of Class A Ordinary Shares would have been experienced during Fiscal 2016, whereas it would have only impacted the latter part of Fiscal 2015.
Electricity sales for Fiscal 2016 were 606.7 million kWh, an increase of 24.7 million kWh or 4% when compared to 582.0 million for Fiscal 2015. Sales were positively impacted by a number of large commercial developments and a 2% growth in overall customer numbers. During 2016 the average monthly kWh consumption rose 6% for residential customers and 2% for commercial customers when compared to 2015.
Electricity sales revenues increased $3.5 million for Fiscal 2016 to $80.2 million when compared to electricity sales revenues of $76.7 million for Fiscal 2015. This increase is primarily attributable to a 4% increase in kWh sales.
President and CEO, Mr. Richard Hew, says, "2016 was a very successful year for CUC. Through the efforts of all of our employees, the Company continued to adequately control its expenses while providing a safe, reliable and efficient service to our customers across Grand Cayman. We are very proud to have reached the milestone of 2 years without a lost time injury ("LTI") on January 27, 2017. This was a notable achievement for the Company's safety record."
The safety of all CUC employees as well as of contractors and members of the public remained a high priority during 2016. Numerous training programmes focused specifically on safety were provided to employees throughout the year.
Electricity consumers continued to enjoy the benefit of lower fuel costs in 2016 driven by a reduction in world market fuel prices as well as the Cayman Islands Government's 30 cent per Imperial Gallon ("IG") reduction in fuel duty effective January 1, 2016. The average Fuel Cost Charge rate per kWh for the twelve months ended December 31, 2016 was $0.13 per kWh compared to the Fuel Cost Charge rate of $0.19 per kWh for the twelve months ended December 31, 2015.
Mr. Hew continued, "In June 2016 the Company also completed its largest capital project to date with the commissioning of the new 40 MW power plant, on time and under budget. This plant, one of the most fuel efficient in the region, drove the Company to achieve its highest ever annual net fuel efficiency of 19.0 kWh per IG in 2016. The combination of lower fuel costs and improved fuel efficiency has resulted in savings of $25.6 million to consumers for the twelve months ended December 31, 2016. At the same time we remain focused on adopting new technologies that are sustainable and environmentally friendly."
The Advanced Metering Infrastructure ("AMI") project was completed during the fourth quarter of 2016. The Smart Meters provide real-time consumption information and also bring efficiencies to meter reading as well as other services. The AMI project will offer a pay-as-you go payment option which will help customers to monitor and control their electricity consumption. This new option will be launched later in 2017.
During 2016, CUC launched the Integrated Resource Plan ("IRP") study. The study analyses all energy resources that are viable and considers their cost, reliability, environmental impact and other aspects and provides a recommended portfolio of energy resources for the market. The Company's goal is to ensure that all energy options are explored before decisions are made on what the grid can accommodate in a safe, reliable and efficient manner. The IRP will give shape to the energy generation and transmission plans for Grand Cayman over the next 30 years.
CUC's 2016 Results and related Management's Discussion and Analysis ("MD&A") for the twelve-month period ended December 31, 2016 are attached to this release and incorporated by reference. They 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 audited 2016 results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and 2016 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 2039 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.
PDF available at: http://files.newswire.ca/520/CUP-AnnualReport.pdf
SOURCE Caribbean Utilities Company, Ltd.
For further information: Letitia Lawrence, Vice President Finance and Chief Financial Officer, Phone: (345) 914-1124, E-Mail: firstname.lastname@example.org