Caribbean Utilities Company, Ltd announces its results for the twelve-month period ended December 31, 2019
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. 14, 2020 /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, 2019 (all figures in United States dollars).
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Operating income for the year ended December 31, 2019 ("Fiscal 2019") totalled $29.5 million, a $1.1 million increase from operating income of $28.4 million for the year ended December 31, 2018 ("Fiscal 2018"). This increase is attributable to higher electricity sales revenues primarily driven by a 6% increase in kWh sales. These items were partially offset by higher depreciation and transmission and distribution costs in Fiscal 2019.
Net earnings for Fiscal 2019 were $29.1 million, a $2.3 million increase from net earnings of $26.8 million for Fiscal 2018. This increase is primarily attributable to higher operating income, lower finance charges and higher other income.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Fiscal 2019 were $28.1 million, or $0.84 per Class A Ordinary Share, as compared to $25.8 million, or $0.78 per Class A Ordinary Share, for Fiscal 2018. The Company calculates earnings per share on the weighted average number of Class A Ordinary Shares outstanding. The weighted average number of Class A Ordinary Shares outstanding were 33,322,444 and 33,078,944 for the years ended December 31, 2019 and December 31, 2018, respectively.
Capital expenditures for Fiscal 2019 were $60.6 million, a $2.6 million, or 5 % increase from $58.0 million in capital expenditures for Fiscal 2018.
President and CEO, Mr. Richard Hew, says, "I am pleased to report the positive overall results of the Company for 2019, including strong financial results which were primarily driven by the increased electricity consumption of residents and businesses participating in Grand Cayman's growing economy. More importantly, during the year the Company engaged in activities that will ensure we successfully deliver safe, reliable, least-cost electricity in a sustainable manner to our customers well into the future. The Company made excellent progress on its Capital Investment Plan activities including building new substations, a control room and an upgrade of monitoring and controls technology, all to increase service capacity and reliability to our customers. The Company also received OfReg approval for a 20 megawatt ("MW") Utility-scale Battery project which is presently in the tendering stage. Battery storage provides the grid stability necessary to integrate higher levels of intermittent renewables."
The Company continues to facilitate the connecting of renewable energy sources to the grid. During 2019, the Customer Owned Renewable Energy ("CORE") programme remained popular with residential and commercial customers who have been connecting their solar panels or wind turbines to the CUC grid. However, the CORE programme is now fully subscribed and as a result there will be no additional residential or commercial customers added to the programme for non-government customers. In its place, the Distributed Energy Resource ("DER") programme was introduced in January 2018. Under the DER programme customers are also able to sell to CUC any excess electricity produced and exported to the grid at an avoided cost-of-generation credit rate. Incorporating the lessons learned by other jurisdictions from early net-metering programmes, DER customers are billed with a demand rate structure. The use of demand rates aligns the fixed costs of providing a grid interconnection and standby provision to the customer with demand charges, avoiding any potential cross-subsidization between DER and non-producing customers.
At December 31, 2019, there were 432 CORE customers connected with 5,611.2 kilowatts of renewable capacity. At December 31, 2019, there were 4 DER customers connected with total installed capacity of 494 kilowatts.
Sales for Fiscal 2019 were 667.7 million kWh, an increase of 38.9 million kWh or 6% when compared to 628.8 million kWh for Fiscal 2018. Sales were positively impacted by an increase in average commercial consumption, warmer weather conditions and growth in overall customer numbers.
In 2019, the Company's customer base increased by 2%. Total customers as at December 31, 2019 were 30,537, an increase of 715 compared to 29,822 customers as at December 31, 2018.
CUC's 2019 Results and related Management's Discussion and Analysis ("MD&A") for the twelve-month period ended December 31, 2019 are attached to this release and incorporated by reference. The release and 2019 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", "plans", "believes", "estimates", "intends", "targets", "projects", "forecasts", "schedules", 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.
SOURCE Caribbean Utilities Company, Ltd.
For further information: Letitia Lawrence - Vice President Finance and Chief Financial Officer, Phone: (345) 914-1124, E-Mail: [email protected]
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