GRAND CAYMAN, Cayman Islands, Nov. 7, 2014 /CNW/ - Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange
Grand Cayman, Cayman Islands- Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the Third Quarter ended September 30 2014 (all figures in United States dollars).
Net earnings for the three months ended September 30, 2014 ("Third Quarter 2014") totalled $6.2 million, an increase of $0.2 million when compared to net earnings of $6.0 million for the three months ended September 30, 2013 ("Third Quarter 2013"). This increase was due to higher electricity sales revenues, lower finance charges and higher other income. These items were partially offset by higher consumer service and transmission and distribution costs, driven by Third Quarter 2014 adjustments to increase the Company's allowance for doubtful accounts and to dispose of certain obsolete inventory.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the Third Quarter 2014 were $6.1 million, or $0.21 per Class A Ordinary Share, comparable to earnings on Class A Ordinary Shares and earnings per Class A Ordinary Share for the Third Quarter 2013.
Net earnings for the nine months ended September 30, 2014 totalled $15.4 million, an increase of $0.7 million when compared to $14.7 million for the nine months ended September 30, 2013.
This increase was due primarily to higher electricity sales revenues, lower depreciation costs and higher other income. These items were partially offset by higher consumer service and transmission and distribution expenses.
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, 2014 were $15.1 million, or $0.52 per Class A Ordinary Share, an increase of $0.8 million from the $14.3 million, or $0.50 per Class A Ordinary Share for the nine months ended September 30, 2013
Sales for the Third Quarter 2014 totalled 153.2 million kilowatt hour, ("kWh") an increase of 7.5 million kWh in comparison to 145.7 million kWh for the Third Quarter 2013. This 5% increase was driven by warmer weather conditions in 2014 and an increase in the number of customers. Total customers as at September 30, 2014 were 27,560, an increase of 384 customers, or 1%, compared to 27,176 customers as at September 30, 2013.
President and CEO, Mr. Richard Hew, says, "The Company continues to focus on delivering a safe and reliable service to its customers while at the same time managing costs and improving efficiencies. As the local economy continues to emerge from the recent recession, the Company stands ready to meet the demands of any accompanying growth in our customer base."
Capital expenditures totaled $7.1 million and reliability of service as measured by the Average
Service Availability Index, was 99.93% for the Third Quarter 2014.
In October 2014, the Electricity Regulatory Authority ("ERA") announced that the Company's bid to supply new generation capacity had been selected as the top proposal of the bids submitted in response to the ERA's request for proposals issued on January 31, 2014. As a result, CUC will develop and operate a new 39.7 megawatts ("MW") diesel power plant including a 2.7 MW waste heat recovery steam turbine. The project cost is estimated at $85 million and the plant will be commissioned no later than June 2016.
This project will require a significant, long-term financial undertaking by CUC to deliver the benefits of the highly efficient production of electricity for consumers in Grand Cayman. The Company is now moving forward to the signing of agreements with its equipment provider MAN Diesel & Turbo of Augsburg, Germany and the primary construction contractor BWSC of Denmark, to build and commission the new power plant.
The Company also continues to explore large-scale alternative energy options. During the period under review, one of the renewable energy providers which is currently in discussions with the Company applied for Planning Department permission to start the development of a 5MW solar power plant. It is anticipated that the output from this renewable energy project will be available to the Company in 2016. The Company believes that there are economic and environmental benefits to be derived from renewable energy sources. These renewable energy sources will replace some of the diesel fuel presently used in our generators.
CUC's Third Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended September 2014 are attached to this release and incorporated by reference and can be accessed by clicking the link at the end of this release.
The MD&A section of this report contains a discussion of CUC's unaudited 2014 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 2029 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]