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, Nov. 2, 2018 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the Third Quarter ended September 30, 2018 (all figures in United States dollars).
Net earnings for the three months ended September 30, 2018 ("Third Quarter 2018") totalled $9.2 million, an increase of $1.5 million when compared to net earnings of $7.7 million for the three months ended September 30, 2017 ("Third Quarter 2017"). Net earnings for the nine months ended September 30, 2018 totalled $18.9 million, an increase of $0.6 million when compared to net earnings of $18.3 million for the nine months ended September 30, 2017. The increase in net earnings for the three and nine months ended September 30, 2018 is attributable to higher electricity sales revenues and other income, and lower general and administration expenses. These items were partially offset by higher depreciation and transmission and distribution costs.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the Third Quarter 2018 were $9.1 million, or $0.27 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $7.6 million or $0.23 per Class A Ordinary Share for the Third Quarter 2017.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the nine months ended September 30, 2018 were $18.6 million, or $0.56 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $18.0 million or $0.55 per Class A Ordinary Share for the nine months ended September 30, 2017.
Kilowatt hour ('kWh") sales for the Third Quarter 2018 totalled 170.9 million kWh, a decrease of 2.8 million kWh in comparison to 173.7 million kWh for the Third Quarter 2017.
Sales for the nine months ended September 30, 2018 totalled 471.0 million kWh, a decrease of 0.3 million kWh in comparison to 471.3 million kWh for the nine months ended September 30, 2017. Sales for the nine months ended September 30, 2018 were negatively impacted by a 4% decrease in average residential consumption, in addition to a decrease in the number of large commercial customers when compared to the same period last year. However, the number of total customers grew and as at September 30, 2018 were 29,584, an increase of 567 customers, or 2%, compared to 29,017 customers as at September 30, 2017.
The average monthly temperature for the nine months ended September 30, 2018 was 82.5 degrees Fahrenheit as compared to an average monthly temperature of 83.0 degrees for the nine months ended September 30, 2017. The average rainfall for the nine months ended September 30, 2018 was 4.08 inches in comparison to 3.62 inches for the nine months ended September 30, 2017.
Wetter and cooler weather, for the nine months ended September 30, 2018 as compared to the same period in 2017 as well as customer energy efficiency and increasing fuel prices negatively impacted kilowatt hour sales. The Company's average cost per Imperial Gallon of fuel for the Third Quarter 2018 increased 27% to $3.13, compared to $2.46 for the Third Quarter 2017.
The Company continued to execute on its Capital Investment Plan ("CIP") to meet customer growth and improve service reliability, and during the Third Quarter 2018 broke ground for the Seven Mile Beach substation. This new substation which is being built at the cost of $16.7 million will be the Company's first substation to incorporate medium voltage, gas insulated switchgear ("GIS") technology and is also the first of its kind in this region. Following this project, the Company will build a similar substation to serve the Prospect area with ground breaking anticipated in the fourth quarter of this year.
The Company is awaiting the regulator's formal approval of the Integrated Resource Plan ("IRP") which was developed by the Company with public and other stakeholder consultation. The IRP outlines a plan for rapid but stable increase in grid integrated renewable energy sources which will deliver economic and environmental benefits. With world oil prices trending upwards again after an extended period of relatively low and stable prices, the attractiveness of diversified energy sources becomes more compelling.
President and CEO, Mr. Richard Hew, says, "The Third Quarter 2018 kilowatt hour sales were lower than expected but the Company was able to manage costs and deliver an increase in earnings. We continue our investments in leading technology such as the new Seven Mile Beach substation which will serve our customers more reliably and efficiently for many years to come. Rising world fuel prices and the negative impact on cost to serve our customers remain a concern and the Company looks forward to a rapid diversification of the energy sources on the grid during the implementation phase of the Integrated Resource Plan."
The MD&A section of this report contains a more detailed discussion of CUC's unaudited 2018 Third Quarter results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and Third 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 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", "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.
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]