CARIBBEAN UTILITIES COMPANY, LTD. ANNOUNCES SECOND QUARTER 2026 STRATEGIC UPDATES

Caribbean Utilities Company, Ltd. ("CUC" or the "Company") is listed for trading in United States dollars on the Toronto Stock Exchange (TSX: CUP.U). (all figures are stated in United States Dollars unless stated otherwise.)

GEORGE TOWN, Cayman Islands, July 31, 2026 /CNW/ -- CUC reported strong second quarter 2026 financial results, with net earnings increasing as the Company rebounded from a slower first quarter impacted by weather-related reductions in electricity sales. While delivering solid financial performance, CUC remained focused on enhancing customer affordability and generating sustainable value for customers, shareholders, and the communities it proudly serves.

Highlights

Letitia Lawrence, VP Finance & Corporate Services and CFO Accepts award on behalf of CUC

• CUC recognised by Caribbean Electric Utility Services Corporation ("CARILEC") for best service reliability, best environmental performance and best overall performing utility.
• In the three months ended June 30, 2026 ("Q2 2026") $2.0 million in fuel efficiency related costs savings were realised, directly benefiting customers and demonstrating continued commitment to affordability initiatives.
• To further support customer affordability amid rising fuel costs, the Company's collaboration with the Government resulted in a fuel cost relief program effective June through to September.
• Net earnings for Q2 2026 increased by $3.5 million when compared to for the three months ended June 30, 2025 ("Q2 2025"), due to lower depreciation resulting from the life extension of eight generating units and a rebound in kWh sales following the weather-related decline recorded in Q1 2026.
• Dividend yield remained an important driver of investor value, with an annualized dividend yield of 5.4%, supported by consistent quarterly dividend declarations.  
• Continued tourism sector growth resulted in a 16.5% increase in May 2026 stay-over visitors when compared to 2025.
• During Q2 2026, capital expenditures totaled $22.5 million, a decrease of $2.1 million compared to the capital expenditures of $24.6 million for Q2 2025, this investment applied to critical infrastructure required to support reliable service delivery.

Second Quarter 2026 performance summary

($ thousands, except Basic Earnings, Dividends Paid and where otherwise indicated)

	Three Months Ended June 30, 2026	Three Months Ended June 30, 2025	Six Months Ended June 30, 2026	Six Months Ended June 30, 2025	Change	% Change
Electricity Sales Revenues	35,047	32,600	63,564	60,792	2,772	5 %
Fuel Factor	35,363	33,576	69,853	65,957	3,896	6 %
Renewables	1,618	1,653	2,798	2,800	(2)	-
Z-Factor^1	1,247	1,602	2,429	2,964	(535)	(18 %)
Total Operating Revenues	73,275	69,431	138,644	132,513	6,131	5 %
Power Generation^2	38,885	36,347	76,481	71,474	5,007	7 %
Depreciation	10,661	13,528	21,401	25,402	(4,001)	(16 %)
Other Expenses	9,268	8,276	19,313	17,993	1,320	7 %
Total Operating Expenses	58,814	58,151	117,195	114,869	2,326	2 %
Net Earnings for the Period	15,044	11,454	22,249	19,058	3,191	17 %
Cash Flow related to Operating Activities	14,489	15,935	36,760	40,658	(3,898)	(10 %)
Per Class A Ordinary Share:
Earnings Per Share (EPS)	0.35	0.27	0.52	0.45	0.07	16 %
Dividends Paid	0.200	0.190	0.390	0.375	0.015	4 %

________________________________

¹ The Z-Factor mechanism is designed to recover expenses and investments that are outside of the T&D Licence regular rate setting process. The expense or investment is recovered through a Z-Factor rate surcharge. Beginning Quarter Four 2024, projects with approved Z-Factor mechanism were completed and the applicable revenue is being accrued to Regulatory Assets pending approval of the Z-Factor Rate by the regulator

² All amounts from Fuel Factor and Renewables revenues are included within the Power Generation expense as they are passed through to customers without mark-up as a per kWh charge

Second Quarter performance
Net earnings for Q2 2026 were $15.0 million, a $3.5 million increase from net earnings of $11.5 million for Q2 2025. After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Q2 2026 were $14.9 million or $0.35 per Class A Ordinary Share, as compared to $11.3 million or $0.27 per Class A Ordinary Share for Q2 2025.  A decrease in deprecation, an approved base rate increase effective June 1, 2026, and increased sales contributed to this increase in net earnings. Net earnings for the six months ended June 30, 2026, were $22.2 million, a $3.1 million increase from net earnings of $19.1 million for the six months ended June 30, 2025. After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the six months ended June 30, 2026, were $22.0 million, or $0.52 per Class A Ordinary Share, as compared to $18.8 million, or $0.45 per Class A Ordinary Shares for the six months ended June 30, 2025.  The Company's earnings growth reflects the robustness of the Grand Cayman economy and the Company's ongoing efforts to improve efficiency and strengthen operational performance.

Improved customer affordability through fuel cost savings
During Q2 2026, the Company achieved an estimated fuel savings of 0.6 million imperial gallons, reducing fuel costs by approximately $2.0 million, or 5%. As fuel is the largest component of customer electricity bills, these savings highlight the benefits of strategic investments in critical infrastructure, including the Battery Energy Storage System and lifecycle upgrades to major generating units, which continue to improve efficiency and lower costs for customers.

In June 2026, the Company partnered with the Cayman Islands Government ("CIG") to implement a fuel cost relief programme benefiting approximately 95% of residential customers. Under the initiative, CIG subsidized fuel costs above CI$0.18 per kWh (US$0.21 per kWh) during the summer months, helping to shield customers from fuel price volatility while maintaining safe and reliable delivery of electricity.

The Company also remains focused on enhancing affordability and advancing the Cayman Islands' energy transition through alternative energy sources, including utility-scale solar. The Utility Regulation and Competition Office ("URCO") is currently evaluating bids for a proposed 22.5 megawatt solar project, the largest renewable energy project in Cayman Islands history.  CUC has been shortlisted as a top-ranked bidder, and the Company looks forward to the outcome of the process.

Regional Recognition through CARILEC
In May 2026, the Company received three Gold Awards at the CARILEC CEO and Leadership Conference: Overall Best Performing Utility, Best Service Reliability, and Best Environmental Performance (shared). These awards recognise excellence in operational performance, service reliability, environmental stewardship, and overall utility management.

The CARILEC Awards of Excellence programme, introduced in 2026, recognises outstanding achievements across the Caribbean electric utility sector based on member utility performance data. These accolades reinforce CUC's commitment to excellence while highlighting Grand Cayman as a regional leader in innovation, reliability, and sustainable energy practices.

Mr. Richard Hew, CEO said: "As CUC marks its 60th anniversary year, the Company is proud of its enduring contribution to Grand Cayman's community. CUC remains focused on energy efficiency and the clean energy transition, especially utility-scale solar to deliver lower energy costs.  We are particularly proud to be recognised by CARILEC as a leading utility in the Caribbean, a testament to our exceptional service reliability, strong environmental performance, and overall operational excellence.

Tourism Sector Growth Continues
The Cayman Islands tourism sector maintained strong growth in 2026, supporting commercial activity and increasing demand for electricity. The destination recorded its highest-ever monthly stayover arrivals in March with more than 64,000 visitors, while May stayover arrivals reached approximately 40,000, reflecting continued year-over-year growth. Ongoing tourism-related developments are expected to further support economic activity and commercial electricity demand.

For more information on CUC's Quarterly and Annual Results, please visit www.cuc-cayman.com.

CUC's Second Quarter 2026 results and related Management's Discussion and Analysis ("MD&A") are attached to this release and incorporated by reference.  The MD&A section of this report contains a discussion of CUC's unaudited Second Quarter 2026 results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and the Second Quarter 2026 MD&A can be accessed at www.cuc-cayman.com (Investor Relations/Press Releases) and at www.sedarplus.ca. 

The principal activity of the Company is to generate, transmit and distribute electricity in its licence area of Grand Cayman, Cayman Islands, pursuant to a 20-year Transmission & Distribution ("T&D") Licence and a 25-year non-exclusive Generation Licence (the "Generation License" and together with the T&D Licence, the "Licences") granted by the Cayman Islands Government (the "Government", "CIG"). The T&D Licence, which expires in April 2028, contains provisions for an automatic 20-year renewal and the Company has reasonable expectation of renewal until April 2048. The Generation Licence expires in November 2039. 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.   

Photo:
Letitia Lawrence, Vice President of Finance and Corporate Services and Chief Financial Officer accepts the award on behalf of CUC 

SOURCE Caribbean Utilities Company, Ltd.

Letitia Lawrence, Vice President Finance and Chief Financial Officer, Phone: [phone], E-Mail: [email protected]