Caribbean Utilties Company, Ltd Announces Third Quarter Results for the Period Ended September 30th, 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, Oct. 29, 2021 /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, 2021 (all dollar amounts are stated in United States dollars).
Results for the Company for the three months ending September 30, 2021 ("Third Quarter 2021" or "Q3 2021") were stable considering the impact that the COVID-19 pandemic continues to have on the economy of the Cayman Islands with the tourism sector remaining closed.
Net earnings for Q3 2021 totalled $10.1 million, a decrease of $0.3 million when compared to $10.4 million for the three months ending September 30, 2020 ("Third Quarter 2020" or "Q3 2020"). The decrease is primarily attributable to lower operating income, partially offset by lower finance charges and higher foreign exchange gains.
The Company successfully completed a Rights Offering (the "Offering") on October 29, 2020 and raised gross proceeds of $47.8 million through the issue of 3,359,362 Class A Ordinary Shares at a price of $14.24 per Class A Ordinary Share. The net proceeds of the Offering were used to repay short-term debt and to finance capital projects.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Q3 2021 were $10.0 million, or $0.26 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $10.2 million, or $0.31 per Class A Ordinary Share for Q3 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 37,240,262 for Q3 2021 and 33,593,624 for Q3 2020. This increase in the weighted average number of Class A Ordinary Shares outstanding was primarily driven by the Offering in October 2020 which resulted in the issuance of 3,359,362 Class A Ordinary shares.
Net earnings for the nine months ended September 30, 2021 totalled $22.0 million, an increase of $3.3 million when compared to net earnings of $18.7 million for the nine months ended September 30, 2020. The increase is primarily attributable to higher operating income, lower finance charges and higher other income.
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, 2021 were $21.7 million, or $0.58 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $18.3 million, or $0.55 per Class A Ordinary Share, for the nine months ended September 30, 2020. The weighted average number of Class A Ordinary Shares outstanding were 37,263,218 for the nine months ended September 30, 2021 and 33,566,243 for the nine months ended September, 30 2020.
Sales for Q3 2021 totalled 179.9 million kWh, an increase of 4.8 million kWh, or 3% in comparison to 175.1 million kWh for Q3 2020. The increase was driven by higher large commercial and residential customer sales in Q3 2021 compared to Q3 2020, in-line with increased general economic activity. The average monthly temperature for Q3 2021 was 85.7 degrees Fahrenheit as compared to an average monthly temperature of 86.2 degrees for Q3 2020. The average rainfall for Q3 2021 was 6.2 inches as compared to 7.7 inches in Q3 2020.
Sales for the nine months ended September 30, 2021 totalled 494.5 million kWh, an increase of 1.6 million kWh in comparison to 492.9 million kWh for the nine months ended September 30, 2020. Sales for three and nine months ended September 30, 2020 were negatively impacted by the COVID-19 pandemic on the Cayman Islands' economy.
Total customers as at September 30, 2021 were 31,964, an increase of 1,069 customers, or 3%, compared to 30,895 customers as at September 30, 2020.
The average Fuel Cost Charge rate billed to consumers for Q3 2021 was $0.17 per kWh, an increase of $0.07 per kWh when compared to the average Fuel Cost Charge rate of $0.10 per kWh for Q3 2020. CUC passes through all fuel costs to consumers on a two-month lag basis with no mark-up.
The Company continues to work on increasing renewable energy connected to the grid in accordance with its Integrated Resource Plan which recommends pursing 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 is actively engaged with the Utility Regulation and Competition Office on this subject as well as a number of related projects in its efforts to reduce the impact of rising fuel costs on customers' bills.
Renewable energy purchases for Q3 2021 totalled $1.6 million, an increase of $0.2 million when compared to renewables purchases of $1.4 million for Q3 2020. Renewable energy is sourced from the Customer Owned Renewable Energy programme and BMR Energy Limited and costs are passed through to consumers on a two-month lag basis with no mark-up.
Renewable energy purchases for the nine months ended September 30, 2021 totalled $4.4 million, an increase of $0.5 million compared to $3.9 million for the nine months ended September 30, 2020.
President and CEO, Mr. Richard Hew, says, "In Q3 2021, the Company successfully responded to the impact of Tropical Storm Grace and met its safety and reliability targets while continuing to navigate the uncertainty and the myriad of challenges which the COVID-19 pandemic has presented. The Company continues to monitor the Cayman Islands Government's plans to reopen the borders to the tourism industry and to prepare for any related increase in electricity demand including the mitigation of recently heightened global supply chain risks."
Reliability of service to our customers is a key objective for our Company and it is critical to the continuing growth of Grand Cayman. The CUC system Average Availability Index was 99.96% during Third Quarter 2021.
CUC's Third Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended September 30th, 2021 are attached to this release and incorporated by reference and can be accessed through the link with this release.
The MD&A section of this report contains a discussion of CUC's unaudited 2021Third 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", "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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