Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange
GRAND CAYMAN, Cayman Islands, Nov. 4, 2016 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the Third Quarter ended September 30, 2016 (all figures in United States dollars).
Net earnings for the three months ended September 30, 2016 ("Third Quarter 2016") totalled $7.4 million, a decrease of $0.5 million when compared to net earnings of $7.9 million for the three months ended September 30, 2015 ("Third Quarter 2015"). This decrease was due mainly to higher depreciation and finance charges. The higher depreciation and finance charges are as anticipated by the Company and are driven by the completion of the 39.7 megawatts ("MW") Generation Project in June 2016. These items were partially offset by higher electricity sales revenues.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the Third Quarter 2016 were $7.3 million, or $0.22 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $7.8 million or $0.25 per Class A Ordinary Share for the Third Quarter 2015.
Net earnings for the nine months ended September 30, 2016 totaled $19.8 million, an increase of $3.1 million when compared to net earnings of $16.7 million for the nine months ended September 30, 2015. This increase was due mainly to higher electricity sales revenues and lower finance charges. These items were partially offset by higher depreciation costs.
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, 2016 were $19.5 million, or $0.60 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $16.4 million or $0.53 per Class A Ordinary Share for the nine months ended September 30, 2015.
Sales for the Third Quarter 2016 totalled 165.4 million kilowatt-hours ("kWh"), an increase of 5.0 million kWh in comparison to 160.4 million kWh for the Third Quarter 2015 driven primarily by higher overall customer numbers. Sales for the nine months ended September 30, 2016 totaled 457.2 million kWh, an increase of 21.8 million kWh in comparison to 435.4 million kWh for the nine months ended September 30, 2015. Sales for the nine months ended September 30, 2016 were positively impacted by large commercial development and higher overall customer numbers when compared to the same period last year.
The total number of customers as at September 30, 2016 were 28,498, an increase of 463 customers, or 2%, compared to 28,035 customers as at September 30, 2015.
The Company's average price per Imperial Gallon ("IG") of fuel for the Third Quarter 2016 decreased 21% to $2.31, compared to $2.93 for the Third Quarter 2015. The Company's average price per IG of fuel for the nine months ended September 30, 2016 decreased to $2.17 when compared to $3.08 for the nine months ended September 30, 2015.
Net fuel efficiency for the Third Quarter 2016 of 19.51 kWh per IG increased when compared to net fuel efficiency for the Third Quarter 2015 of 18.53 kWh per IG. Net fuel efficiency for the Third Quarter 2016 was the highest ever achieved in the Company's history and is due primarily to the new generating units installed in June 2016 and the discontinuation of the use of temporary mobile generation. This improvement in fuel efficiency resulted in $1.1 million lower fuel costs to consumers for the three months ended September 30, 2016 when compared to the same period last year.
President and CEO, Mr. Richard Hew, says, "Year to date electricity sales and earnings remain strong when compared to 2015. Earnings for the review period declined slightly when compared to the same period in 2015. This reflects the financing and depreciation charges related to the significant investment in the new Generation Plant. The company completed and successfully integrated the new plant in time to serve a record system demand of 103.4 MW experienced in July. As well as providing reliable power, the new plant also delivered on the promise of higher fuel efficiency, reducing fuel costs to our customers. CUC remains committed to providing least-cost, safe, and reliable electricity service to our customers."
Work continues on the 5 MW Solar Project at Bodden Town. CUC has substantially completed the interconnection facilities for the project including a new 13 Kilovolts ("kV") line. However, the developer, Entropy Cayman Solar Limited has advised that they are behind schedule. The new timeframe for the completion of this project has been set for the Second Quarter 2017.
During the Third Quarter 2016, the Company launched the Integrated Resource Plan ("IRP") study. The study analyses all energy resources that are viable and considers their cost, reliability, environmental impact and other aspects, and provides a recommended portfolio of energy resources for the market. The Company's goal is to ensure that all energy options are explored before decisions are made on what the grid can accommodate in a safe, reliable and efficient manner. This study is being performed by strategy planning consulting company Pace Global and is expected to be completed by First Quarter 2017. The IRP will give shape to the energy generation plans for Grand Cayman over the next 30 years.
The Advanced Metering Infrastructure (AMI) project is now 95% completed. The full roll-out of this project is expected by the end of 2016. These Smart Meters provide real-time consumption information and also bring efficiencies to meter reading as well as other customer services. The AMI project will offer a pay-as-you-go option which will help customers to monitor and control their electricity consumption.
The Cayman Islands Government recently passed legislation to facilitate the reform of the regulatory arrangements in the utilities sector. The objective is to establish a multi-sector regulator to be known as the Utility Regulation and Competition Office by merging the operations of the Information and Communications Authority ("ICTA") and the Electricity Regulatory Authority ("ERA"), and expanding the role to regulate the provision of water and waste water services and to have responsibility for the fuels markets. These changes in legislation are not expected to materially affect CUC's Licences or business.
CUC's Third Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended September 30 2016 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 2016 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]