Caribbean Utilities Company, Ltd. is listed for trading in United States
dollars on the Toronto Stock Exchange
GRAND CAYMAN, Cayman Islands, May 7, 2013 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company")
announced today its unaudited results for the First Quarter ended March
31st 2013 (all figures in United States dollars).
Despite continuing declines in kilowatt-hour ("kWh") sales, CUC's
earnings for the three months ended March 31, 2013 ("First Quarter
2013") improved over the same period last year as the Company continued
its focus on controlling costs and improving efficiencies throughout
Net earnings for the First Quarter 2013 totalled $2.9 million, an
increase of $1.0 million, or 53%, when compared to $1.9 million for the
three months ended March 31, 2012 ("First Quarter 2012"). This increase
was due primarily to lower general and administration and financing
costs as well as an increase in other income. General and
administrative expenses for the First Quarter 2012 included a one-time
charge of $0.3 million related to restructuring costs incurred to
further streamline CUC's organizational structure. Maintenance costs
also declined as a result of the ongoing capital-related projects that
upgrade and improve the performance of the Company's fleet of
These items were partially offset by a 1% decline in kilowatt-hour (kWh)
sales and higher depreciation costs for the First Quarter 2013 when
compared to the First Quarter 2012.
After the adjustment for dividends on the preference shares of the
Company, earnings on Class A Ordinary Shares for the First Quarter 2013
were $2.8 million, or $0.10 per Class A Ordinary Share, an increase of
$1.0 million when compared to $1.8 million, or $0.06 per Class A
Ordinary Share for the First Quarter 2012.
Kilowatt- hour sales for the First Quarter 2013 totalled 125.5.million
kWh, which is a decrease of 0.9 million kWh, or 1% when compared to
126.4 million kWh for the First Quarter of 2012.
President and CEO, Mr. Richard Hew, says, "With a weak economy and high
fuel costs, customers continue to conserve energy. The Company remained
focused on controlling its operating costs while investing in required
infrastructure to meet current and future demand as needed. CUC has
been making every effort to ensure that its customers are provided with
a safe and reliable electricity service at least cost."
Capital expenditures for the First Quarter 2013 were $6.4 million and
system reliability was recorded at 99.97%.
A Certificate of Need for generation capacity was issued to the
Electricity Regulatory Authority ("ERA") by the Company in November
2011. This was driven primarily by the upcoming retirements of some of
the Company's generating units beginning in 2014.
In March 2012, the ERA solicited Request for Proposals (RFP) for an
additional 36 megawatts ("MW") of generation capacity from qualified
bidders, including CUC. In February 2013, the Company was advised that
another local company, DECCO Ltd., had won the bid.
In April 2013, the ERA announced that it would be engaging an
independent party to conduct an investigation into the 36 MW bid
process following public statements being made by its former managing
director concerning alleged irregularities with the process.
Mr. Hew stated, "The Company is becoming increasingly concerned that the
ongoing delays in the process to secure firm generating capacity may
lead to inadequate installed generation capacity, given that 18 MW of
the 36 MW of capacity was intended to have been installed for July 2014
to serve the needs of Grand Cayman. However, we will explore all
options, including temporary generation solutions to mitigate the
threat of extended power outages for the summer of 2014."
During the quarter under review the Company also continued discussions
with prospective providers of alternative energy in the areas of solar
and wind. Once the negotiations are completed and agreements have been
reached with all parties, an announcement will be made.
Mr. Hew added "The addition of renewable sources will not allay concerns
regarding reliability as these sources are not considered firm
capacity. However, we believe there are economic and environmental
benefits to engage renewable energy sources to displace some of the
diesel fuel that our generators presently consume."
CUC's First Quarter results and related Management's Discussion and
Analysis ("MD&A") for the period ended March 31st 2013 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
2013 First Quarter results, the Cayman Islands economy, liquidity and
capital resources, capital expenditures and the business risks facing
the Company. The release and First 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.
PDF available at: http://stream1.newswire.ca/media/2013/05/07/20130507_C4563_DOC_EN_26477.pdf
SOURCE: Caribbean Utilities Company, Ltd.
For further information:
Contact: Letitia Lawrence
Vice President Finance and Chief Financial Officer
Phone: (345) 914-1124