CARIBBEAN UTILITIES COMPANY, LTD. (CUC) ANNOUNCES QUARTER ONE (2024) RESULTS AND STRATEGIC MILESTONES
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, May 1, 2024 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC or "the Company") announced its consolidated unaudited results for the three months ended March 31, 2024 ("First Quarter 2024" or "Q1 2024") (all figures stated in United States Dollars).
Highlights for Q1 2024 were as follows:
Financial Growth
- Net Earnings for Q1 2024 totaled $6.2 million, 18% increase compared to Q1 2023.
- 6% increase in kilowatt-hour ("kWh") sales when compared to three months ended March 31, 2023 ("First Quarter 2023" or "Q1 2023").
- 2% increase in total customers when compared to Q1 2023.
Capital Expenditures
- Investments in sustainability includes purchase of more electric vehicles to add to the fleet, the utility scale Battery Energy Storage System project ("BESS") and the public electric vehicle charging station programme.
- Total capital expenditures for the three months ended March 31, 2024, totaled $19.3 million which included projects to improve grid resiliency, generation asset upgrades, and construction of infrastructure to transition to lower carbon energy.
- Two 10-megawatt ("MW") BESS located at Hydesville and Prospect sub-stations. Systems will be online in the first half of 2024 and the systems are anticipated to lower fuel costs and improve fuel efficiency by up to 5-6%.
Carbon Reduction Initiatives
- Request for Qualification for the provision of Liquid Natural Gas as a transitional fuel was completed in 2023, this project is progressing with the Request for Proposal to be issued in 2024.
- Lifecycle upgrades for first generating unit were completed and work has commenced on the second of five units planned for upgrade. Upgrades will improve fuel efficiency and allow the engines to be easily converted to dual fuel when LNG is an option on Grand Cayman.
- 20 Electric Vehicle ("EV") charging stations installed with an anticipated further 20 charging stations by the end of 2024.
Community Commitment and Recognition
- Continued commitment to community development showcased through partnerships and support programmes. Programmes assisted in Q1 2024 were Cayman Athletics through the hosting of the CARIFTA trials and Cayman Swimming through the hosting of the CUC Sea Swim.
- Green Diamond Award recipient in 2023 for recycling excellence and recycling over 2.7 million pounds of scrap metal, cable, transformers and other recyclable material.
The Company continues to deliver reliable and safe electricity service to our customers. During the First Quarter, the Company continued to make progress on major projects that are aimed at reducing costs and carbon emissions.
Net Earnings and Sales Revenues
Net earnings for Q1 2024 were $6.2 million, a $1.0 million increase when compared to net earnings of $5.2 million for Q1 2023. After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Q1 2024 were $6.0 million, or $0.16 per share, as compared to $5.1 million, or $0.14 per share for Q1 2023.
Sales in kWh for Q1 2024 were 168.1 million kWh which is an increase of 9.3 million kWh or 6% compared to Q1 2023. The increase was due to the 7% sales growth in both residential and large commercial customers. For large commercial customers this increase was driven by economic growth and for residential customers this growth was mainly attributed to increased average consumption. The average temperature for Q1 2024 was 80.8 degrees Fahrenheit compared to the average temperature of 80.6 degrees Fahrenheit in Q1 2023. Rising temperatures contributed to the overall growth in consumption for customers.
Fuel factor and renewable energy costs are passed through to customers with no mark-up. Fuel Factor consists of charges from diesel fuel and lubricating oil costs, which are passed through to consumers on a two-month lag basis. The average Fuel Cost Charge rate charged to consumers for Q1 2024 was $0.23 per kWh, compared to the Fuel Cost Charge rate of $0.24 per kWh for Q1 2023.
"The Company continues to focus on our capital investment and infrastructure projects with an emphasis on sustainability. We continue to make investments that will allow CUC to increase fuel efficiency and reduce our reliance on diesel all while continuing to safely deliver reliable and least cost energy," said Mr. Richard Hew, President and Chief Executive Officer.
Key Updates
In Q1 2024 the Company continued to focus on its carbon reduction efforts through the EV charging station programme. The EV charging station programme was adopted as an action item resulting from the Company's goal to abide by and embrace the current National Energy Policy which outlined the need to provide more options for electric vehicles throughout the island.
Two 10MW BESS have been placed separately at the Hydesville and Prospect sub-station locations and it is anticipated that these systems will be installed and in use by the end of May 2024. These storage systems will allow for further renewable energy, upon approval by the regulator, on the grid and allow for savings of up to $5 million per year in fuel costs.
Capital Expenditures
Capital Expenditures for the three months ended March 31, 2024, were $19.3 million, a decrease of $3.5 million or 15% in comparison to the $22.8 million in capital expenditures for the three months ended March 31, 2023. The expenditures for the three months ended March 31, 2024, were primarily related to:
- Distribution system extension and upgrades
- Generation replacements
- Lifecycle upgrades
- Alternate energy technologies
- Installation of BESS,
- Facility and auxiliary asset replacement costs, and other resiliency projects
The above capital projects will enhance the reliability and safe delivery of electricity service to the customers of Grand Cayman. The Company continues to be committed to carbon reduction targets of 60% by 2030 and projects that will allow for cost reduction savings for the customers of Grand Cayman.
CUC's First Quarter 2024 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 First Quarter 2024 results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and the First Quarter 2024 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.
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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