Caribbean Utilities Company, Ltd Announces Unaudited Results for the three and nine months ended September 30, 2022
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, Oct. 28, 2022 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the three and nine months ended September 30, 2022 (all dollar amounts are stated in United States dollars).
The results for the Company for the three months ended September 30, 2022 ("Third Quarter 2022" or "Q3 2022") show growing customer numbers and energy sales, but with lower average consumption by residential customers in the face of high fuel prices. The Company successfully facilitated a Cayman Islands Government Fuel Cost Relief programme to assist residential customers. Depreciation charges increased for the quarter related to the Seven Mile Beach and Prospect Substations and other growth-related capital projects coming into service. Reliability and safety results were as planned and the Company endured Tropical Storm Ian with minimal physical damage. Earnings increased marginally for the quarter over the same period last year.
A highlight of the Third Quarter 2022 was the signing of an agreement with the technology group Wärtsilä. Wärtsilä will supply two 10-megawatt /10 megawatt-hour energy storage systems to CUC. This project is primarily designed to reduce the online or spinning reserve requirement presently provided by diesel engines and will improved fuel efficiency by approximately 6%, with a corresponding reduction in CO2 emissions. This is CUC's first energy storage facility and it will also enable the Company to increase the amount of intermittent renewable energy connected to the grid on Grand Cayman while improving grid stability, reliability and power quality.
During Third Quarter 2022, as part of the Company's ongoing restructuring programme, CUC announced the promotion of four Caymanians to its management team. CUC also released its first Sustainability report which discusses programmes that demonstrate CUC's commitment to the high standards in Environmental, Social and Governance initiatives.
Global fuel prices continued to rise in the third quarter impacting CUC's fuel costs. Power generation expenses for Q3 2022 totalled $52.4 million, an increase of 70% compared to power generation expenses of $30.8 million for the three months ended September 30, 2021 ("Third Quarter 2021" or "Q3 2021"). This is primarily due to the 75% increase in the average fuel price per imperial gallon during Q3 2022 in comparison to Q3 2021). The average Fuel Cost Charge rate billed to consumers for Q3 2022 was $0.29 per kilowatt-hours ("kWh"), compared to the average Fuel Cost Charge rate of $0.17 per kWh for Q3 2021. CUC passes through all fuel costs and renewable costs to consumers on a two-month lag basis with no mark-up. The Company continues to provide information to customers on ways to manage their energy consumption.
Net earnings for Q3 2022 totalled $10.4 million, an increase of $0.3 million or 3% in comparison to $10.1 million Q3 2021. This was due to the increase in kWh sales by 2% and the customer growth of 3%. The net earnings during Q3 2022 were positively impacted by the decrease of transmission and distribution costs and higher foreign exchange gains and negatively impacted by increase in depreciation expense, general and administration cost and higher finance charges.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Q3 2022 totalled $10.3 million, or $0.28 per Class A Ordinary Share, in comparison to earnings of $10.0 million, or $0.26 per Class A Ordinary Share for Q3 2021.
Net earnings for the nine months ended September 30, 2022 totalled $24.2 million, an increase of $2.2 million or 10% when compared to net earnings of $22.0 million for the nine months ended September 30, 2021.
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, 2022 totalled $23.9 million, or $0.64 per Class A Ordinary Share, in comparison to earnings on Class A Ordinary Shares of $21.7 million, or $0.58 per Class A Ordinary Share, for the nine months ended September 30, 2021.
Sales for Q3 2022 totalled 184.0 million kWh, an increase of 4.1 million kWh or 2% in comparison to 179.9 million kWh for Q3 2021. The increase in sales was driven by the higher commercial customer sales in Q3 2022 compared to Q3 2021 and the 3% increase in customer numbers between Q3 2022 and Q3 2021.
Sales in kWh for the nine months ended September 30, 2022 totalled 504.6 million kWh, an increase of 10.1 million kWh or 2% in comparison to 494.5 million kWh for the nine months ended September 30, 2021. The increase in sales is primarily due to a 3% growth in overall customer numbers for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The number of customers at the end of September 30, 2022 was 32,865, an increase of 901 customers, or 3%, compared to 31,964 customers as at September 30, 2021.
During Q3 2022, the Company recorded a new system peak load of 113.573 megawatts.
President and CEO, Mr. Richard Hew, stated, "The state of the current global fuel markets emphasizes the need and our desire to advance activities under the Integrated Resource Plan as quickly as possible, particularly utility scale solar projects, to transition to more sustainable energy solutions that bring price stability and reduce carbon emissions. Tropical Storm Ian also reminds us of the importance of building resilient systems such as our indoor substations to adapt to more frequent storms brought by climate change."
CUC's Third Quarter 2022 results and related Management's Discussion and Analysis ("MD&A") for the period ended September 30, 2022 are incorporated by reference.
The MD&A section of this report contains a discussion of CUC's unaudited 2022 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 2022 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.
Letitia Lawrence, Vice President Finance and Chief Financial Officer, Phone: (345) 914-1124, E-Mail: [email protected]
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