Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange
GRAND CAYMAN, CAYMAN ISLANDS, May 5, 2015 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the First Quarter ended March 31, 2015 (all figures in United States dollars).
Net earnings for the three months ended March 31, 2015 ("First Quarter 2015") totalled $3.3 million, a decrease of $0.1 million when compared to net earnings of $3.4 million for the three months ended March 31, 2014 ("First Quarter 2014"). This decrease was due mainly to higher depreciation and transmission and distribution costs. These items were partially offset by lower consumer services costs and higher other income.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the First Quarter 2015 were $3.2 million, or $0.11 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $3.3 million or $0.11 per Class A Ordinary Share for the First Quarter 2014.
Sales for the First Quarter 2015 totalled 129.0 million kWh, a decrease of 1.7 million kWh in comparison to 130.7 million kWh for the First Quarter 2014. The average monthly temperature for the First Quarter 2015 was 79.5 degrees Fahrenheit as compared to average monthly temperature of 80.0 degrees for First Quarter 2014. Cooler temperatures reduce air conditioning load which can negatively impact the Company's sales.
During the First Quarter 2015, there was an increase in the number of customers connected to the CUC grid. The total number of customers as at March 31, 2015 was 27,873, an increase of 435 customers, or 2%, compared to 27,438 customers as at March 31, 2014.
President and CEO, Mr. Richard Hew, stated that, "The Cayman Islands economy continues to show positive signs of growth with tourism air arrivals increasing 5.7% during the First Quarter 2015 over the same period last year and Gross Domestic Product growth for 2015 projected at 2%. There were also a number of positive developments recorded by the Company during the period under review. Most significantly, on March 5, 2015 the groundbreaking event took place to commence the installation of two new 18.5 megawatt (MW) V48/60 medium-speed diesel generating units and one 2.7 MW waste heat recovery steam turbine." When completed next summer, this additional firm capacity will replace some of the Company's retiring generating units and allow CUC to continue to provide customers with cost effective, safe and reliable electricity service. The new Plant will be one of the most efficient in the region and is anticipated to improve CUC's current fuel efficiency by approximately 6%. The approximate cost of the Generation Expansion Project is US$85 million.
On May 4, 2015, the Company announced that it had successfully completed its previously announced rights offering (the "Offering") which had commenced in March 2015. Under the Offering and related stand-by agreement, CUC raised gross proceeds of US$31,563,639 through the issue of 2,930,700 Class A Ordinary Shares at a price of US$10.77 per Class A Ordinary Share. After giving effect to the Offering, CUC has an aggregate of 32,237,709 Class A Ordinary Shares outstanding. Fortis Energy (Bermuda) Ltd. ("FEBL"), an existing shareholder of CUC, purchased an aggregate of 2,169,682 Class A Ordinary Shares under the Offering and a stand-by agreement with the Company. FEBL now holds 19,460,326 Class A Ordinary Shares, representing approximately 60.4% of the outstanding Class A Ordinary Shares of CUC, which percentage holding increased approximately 1.5% as a result of the Offering. FEBL is a wholly owned subsidiary of Fortis Inc. of St. John's, Newfoundland and Labrador, Canada.
The Company intends to use the proceeds of the Offering to partially finance the Generation Expansion Project and for other on-going capital expenditures.
Customers saw a reduction in their bills during the First Quarter 2015, reflecting the fact that the Company's average price per Imperial Gallon of fuel for the First Quarter 2015 decreased 32% to $3.24, compared to $4.75 for the First Quarter 2014. This reduction is the result of declining market prices, which began in late 2014, as well as the Cayman Islands Government's reduction of import duty, which went into effect on January 1, 2015. The fuel factor mechanism passes 100% of the fuel costs through to customers who are now receiving the full benefit of these reductions.
During the First Quarter 2015, the Company and the Electricity Regulatory Authority ("ERA") agreed on revisions to the Feed In Tariffs programme which now allows for 4 MW of Consumer-Owned Renewable Energy ("CORE") Generation. These changes went into effect on April 1, 2015.
Mr. Hew added, "We are very pleased with the uptake for CORE, which currently has a subscribed capacity of approximately 2.6 MW. We believe the programme, along with the 5 MW solar project proposed by the Company and currently under review by the ERA, will provide environmental benefits without negatively impacting cost and reliability of service on our small island grid."
The Company believes that reliability of service is critical to the island's continued growth and development. Therefore, the Company continues to focus on investing to maintain or improving the level of service offered to customers. Reliability of service as measured by the average service availability index was 99.95% for the First Quarter 2015 and capital expenditures for the First Quarter 2015 were $7.1 million.
CUC's First Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended March 31, 2015 are attached to this release and can be accessed by clicking the link at the end of this release or on SEDAR at www.sedar.com.
The MD&A section of this report contains a discussion of CUC's unaudited 2015 First Quarter results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and First 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 this release, 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 expressed in forward-looking statements 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.
PDF available at: http://stream1.newswire.ca/media/2015/05/05/20150505_C4557_PDF_EN_16259.pdf
Letitia Lawrence, Vice President Finance and Chief Financial Officer, Phone: (345) 914-1124, E-Mail: [email protected]
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