CUC Q4 2015 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. 18, 2016 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the Fourth Quarter and Twelve Months ended December 31, 2015 (all figures in United States dollars).
Net earnings for the three months ended December 31, 2015 ("Fourth Quarter 2015") were $6.2 million, a $0.8 million increase when compared to $5.4 million for the three months ended December 31, 2014 ("Fourth Quarter 2014"). This increase is attributable to an 8% growth in kilowatt-hour ("kWh") sales and lower finance charges in the Fourth Quarter 2015. These items were partially offset by higher consumer services, general and administration, depreciation, and maintenance costs for the Fourth Quarter 2015 when compared to the Fourth Quarter 2014.
Net earnings for the twelve months ended December 31, 2015 were $22.8 million, a $2.0 million increase from net earnings of $20.8 million for the twelve months ended December 31, 2014. This increase is attributable to a 3% growth in kWh sales, 1.5% and 0.9% base rate increases effective June 1, 2014 and June 1, 2015 respectively, lower finance charges and higher other income. These items were partially offset by higher depreciation, maintenance and general and administration costs.
With the market price of lubricating and fuel oil trending downwards in 2015, customers have seen a significant reduction in the Fuel Cost Charge rate per kWh on their electricity bills.
The average Fuel Cost Charge rate per kWh charged to consumers for the Fourth Quarter 2015 was $0.17, a 39% decrease when compared to $0.28 per kWh for the Fourth Quarter 2014.
The average Fuel Cost Charge rate per kWh charged to consumers for the twelve months ended December 31, 2015 was $0.19 per kWh compared to the Fuel Cost Charge rate of $0.27 per kWh for the twelve months ended December 31, 2014. This decrease in the average Fuel Cost Charge rate has resulted in savings of $46.6 million to consumers for the twelve months ended December 31, 2015.
Further reductions to the Fuel Cost Charge rate per kWh are expected to occur in the first quarter of 2016 due to a decrease in customs duties levied on fuel imports by the Government. The Government has announced a decrease from $0.60 per Imperial Gallon ("IG") to $0.30 per IG for fuel imported as of January 1, 2016.
For the Fourth Quarter 2015, kWh sales were 146.5 million, an increase of 10.7 million kWh or 8% when compared to 135.8 million for the Fourth Quarter 2014. Sales were positively impacted by warmer weather conditions which affected customer air conditioning usage. The average monthly temperature for the Fourth Quarter 2015 was 83.0 degrees, 3.6 degrees Fahrenheit higher than the average monthly temperature experienced during the Fourth Quarter 2014 of 79.4 degrees.
For the twelve months ended December 31, 2015, kWh sales were 582.0 million, an increase of 17.8 million kWh or 3% when compared to 564.2 million kWh for the twelve months ended December 31, 2014. Annual sales were positively impacted by large commercial development, growth in customer numbers and warmer weather conditions that affected customer air conditioning usage. The average temperature for 2015 was 83 degrees Fahrenheit compared to 82 degrees for 2014.
Total customers as at December 31, 2015 were 28,204, an increase of 420, or 2%, compared to 27,784 customers as at December 31, 2014.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the Fourth Quarter 2015 were $5.6 million, or $0.18 per Class A Ordinary Share, as compared to $4.8 million, or $0.16 per Class A Ordinary Share for the Fourth Quarter 2014.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the twelve months ended December 31, 2015 were $21.9 million, or $0.71 per Class A Ordinary Share as compared to $19.9 million, or $0.68 per Class A Ordinary Share for the twelve months ended December 31, 2014.
President and CEO, Mr. Richard Hew, says, "The Fourth Quarter and the Financial Year 2015 were positive in terms of sales and earnings growth. We are also pleased that during the year our customers received a significant reduction in their per kWh electricity costs, benefitting from the full pass through of lower fuel purchase costs. CUC continues to operate successfully in a low growth environment with a focus on delivering a safe and reliable electricity service at least cost. The Company also continues to adopt renewable energy as a sustainable technology path for the future."
During the Fourth Quarter 2015, the Electricity Regulatory Authority ("ERA") approved a Power Purchase Agreement proposed by CUC for a 5 megawatts ("MW") plant to be built by Entropy Cayman Solar Limited in the district of Bodden Town.
This 5 MW Solar project, scheduled for completion in October 2016, will provide energy to power approximately 800 homes with clean renewable solar energy and will significantly reduce emissions into the atmosphere through the avoidance of diesel fuel consumption.
The Consumer-Owned Renewable Energy ("CORE") generation programme which was proposed by CUC and started in 2011 has proven popular with residential and commercial customers who are able to connect their solar panels or wind turbines to the CUC grid. The programme has attracted 226 participants and is nearing its current capacity of 4 MW. CUC and the ERA are currently reviewing the programme to determine if there should be a further addition to the available capacity. It is anticipated that an announcement on the terms for further extension of the CORE programme will be made by March 1st, 2016.
During the Fourth Quarter, the Company's two 18.5 MWV48/60 medium-speed diesel generating units arrived and have been installed in a newly constructed engine room. The new engines are part of the Generation Expansion Project at our North Sound Road Power Plant which is progressing according to plan. The new engine room will also house a 2.7 MW waste heat recovery steam turbine for a total output of 39.7 MW. The new plant, which will boast the most fuel efficient generation ever installed by CUC, will bring increased reliability, lower costs to our consumers and reduce the level of emissions into the environment.
The total project cost is estimated at $85 million and it is expected that the units will be commissioned in May and June this year to replace retiring generating units and meet anticipated future growth by providing firm capacity that intermittent renewables do not currently deliver.
Capital expenditures for the Fourth Quarter 2015 were $25.0 million, a $6.6 million, or 36% increase from $18.4 million in capital expenditures for the Fourth Quarter 2014. Capital expenditures for the twelve months ended December 31, 2015 were $78.0 million, a $38.5 million, or 97% increase from $39.5 million in capital expenditures for the same period of the previous year. During the twelve months ended December 31, 2015, capital expenditure related to the Generation Expansion project totalled $47.9 million.
CUC's Fourth Quarter Report for the period ended December 31, 2015 is attached to this release and incorporated by reference. It can be accessed by clicking the link at the end of the release.
This report contains a detailed discussion of CUC's unaudited 2015 Fourth Quarter 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 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 report, 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 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.
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