Caribbean Utilities Company, Ltd. announces its results for the twelve-month period ended December 31, 2021
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. 11, 2022 /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, 2021 (all figures in United States dollars).
President and CEO of Caribbean Utilities Company, Ltd, Mr. Richard Hew says that during the past two years the Company has invested over $100 million in infrastructure to ensure the delivery of safe, reliable, affordable and sustainable electricity to our customers, while improving efficiencies to control operating costs.
Reflecting on the past year, Mr. Hew stated, "Despite the COVID-19 challenges, the Company made good progress on a number of projects during the past year. The Cayman Islands' economy continued to be impacted in 2021 by the COVID-19 pandemic as the tourism industry remained closed for most of the year. However, the economy proved to be resilient, showing growth in the financial services sector and in the construction sector with new condominiums, commercial buildings and single-family homes driving the Company's 3% kWh sales growth. We are very proud of the excellent service provided by our employees who have been able to quickly adapt throughout a multitude of changing circumstances."
The Company continues to monitor the impact of rising fuel costs on customer bills and is committed to increasing renewable energy connected to the grid in accordance with its Integrated Resource Plan ("IRP"). The IRP recommends pursuing natural gas as a diesel fuel replacement and increasing the utilization of renewable energy for up to 60% of the electricity needs by 2037. The Company remains actively engaged with the Utility Regulation and Competition Office on this as well as a number of related projects in its efforts to reduce the impact of rising fuel costs on customers' bills.
During the year, the Company concluded a Request for Proposals for a 20-megawatt Utility-Scale Battery for its Instantaneous Reserves project. The primary function of the Utility-Scale Battery is to provide instantaneous or "spinning" reserve in the event of a sudden loss in power generation. By replacing the spinning reserve normally provided by CUC's online generators, fewer generators will need to be online, significantly reducing the amount of fuel consumed for electricity production. As a direct result of this project, the Company expects that the initial magnitude of savings to the customers will be around $1 million per annum. This project is scheduled for completion in 2023. Battery storage also provides the grid stability necessary to integrate higher levels of intermittent renewables.
Renewable energy purchases for the year ended December 31, 2021 ("Fiscal 2021") totalled $5.8 million, an increase of $0.8 million when compared to December 31, 2020 ("Fiscal 2020"). Renewable energy is sourced from the Customer Owned Renewable Energy and Distributed Energy Resources programmes and Bodden Town Cayman Solar 1 Limited and costs are passed through to consumers on a two-month lag basis with no mark-up.
Operating income for Fiscal 2021 totalled $30.2 million, a $1.3 million increase from operating income of $28.9 million for Fiscal 2020. This increase is primarily attributable to higher electricity sales revenues, partially offset by higher general and administration, transmission and distribution and depreciation costs.
Net earnings for Fiscal 2021 were $30.3 million, a $4.2 million increase from net earnings of $26.1 million for Fiscal 2020. This increase is primarily attributable to higher operating income and lower finance charges.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Fiscal 2021 were $29.3 million, or $0.79 per Class A Ordinary Share, as compared to $25.1 million, or $0.74 per Class A Ordinary Share, for Fiscal 2020. 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 37,199,456 and 34,126,137 for the years ended December 31, 2021 and December 31, 2020, respectively. The Company successfully completed a Rights Offering on October 29, 2020. The Rights Offering raised gross proceeds of $47.8 million through the issue of 3,359,362 Class A Ordinary Shares.
Capital expenditures for Fiscal 2021 were $60.2 million, a $6.8 million or 13% increase from $53.4 million in capital expenditures for Fiscal 2020.
Sales for Fiscal 2021 were 660.5 million kWh, an increase of 16.2 million kWh or 3% when compared to 644.3 million kWh for Fiscal 2020. This was driven by an increase in kWh consumption across all customer categories and a 3% growth in overall customer numbers in Fiscal 2021 compared to Fiscal 2020. Fiscal 2020 sales were negatively impacted by the COVID-19 pandemic and the resulting shutdown of the Cayman Islands' economy.
Total customers as at December 31, 2021 were 32,185, an increase of 892 compared to 31,293 customers as at December 31, 2020.
CUC's 2021 results and related Management's Discussion and Analysis ("MD&A") for the twelve-month period ended December 31, 2021 are attached to this release and incorporated by reference. The release and 2021 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.
Letitia Lawrence, Vice President Finance and Chief Financial Officer, Phone: (345) 914-1124, E-Mail: [email protected]
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