Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange
GRAND CAYMAN, Cayman Islands, Aug. 1, 2013 /CNW/ - Caribbean Utilities Company, Ltd. (TSX:CUP.U) ("CUC" or "the Company") announced today its unaudited results for the Second Quarter ended June 30 2013 (all figures in United States dollars).
Net earnings for Caribbean Utilities Company (CUC) for the three months ended June 30, 2013 ("Second Quarter 2013") were $5.7 million, an increase of $0.6 million when compared to $5.1 million for the three months ended June 30, 2012 ("Second Quarter 2012"). This increase was due primarily to a 3% increase in kilowatt-hour sales ("kWh") and lower financing costs.
Maintenance costs also declined as a result of the focus on capital-related generation upgrades during this period. These items were partially offset by higher depreciation costs.
Sales for the Second Quarter 2013 totalled 144.3 million kWh, an increase of 4.4 million kWh in comparison to 139.9 million kWh for the Second Quarter 2012. Quarter-over-quarter kWh sales were positively impacted by a 1% growth in overall customer numbers and less rainfall during the period under review.
The Second Quarter 2012 was negatively impacted by rainy weather conditions which reduced customer air conditioning load during that period. The average monthly rainfall for the Second Quarter 2013 was 4.4 inches as compared to average monthly rainfall of 9.3 inches for Second Quarter 2012.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the Second Quarter 2013 were $5.6 million, or $0.19 per Class A Ordinary Share, an increase of $0.6 million from the $5.0 million, or $0.18 per Class A Ordinary Share for the Second Quarter 2012.
President and CEO, Mr. Richard Hew, says, "The Second Quarter 2013 financial and operating results were stable. The Cayman Islands economy remains a concern for the Company and we continue to focus on costs and efficiencies while maintaining a safe and reliable service to our customers."
In November 2011, CUC issued a Certificate of Need for generation capacity to the Electricity Regulatory Authority ("ERA"). This was driven primarily by the upcoming retirements of some of the Company's generating units due to begin in 2014.
In March 2012, the ERA solicited Request for Proposals (RFP) for an additional 36 megawatts ("MW") of generation capacity from qualified bidders (including CUC). In February 2013, the Company was advised that another local company, DECCO Ltd., had won the bid.
In April 2013, the ERA announced that it would be engaging an independent party to conduct an investigation into the 36 MW bid process following public statements being made by its former managing director concerning alleged irregularities with the process. In July 2013, the ERA announced that, in its view, as a result of unavoidable and unforeseen delays, the timetable and various milestones provided for in the solicitation cannot now be achieved and that it had taken the decision to cancel the solicitation process.
The Company believes that the need for additional firm generating capacity remains and in light of the ERA's decision to cancel the solicitation, the Company will explore all cost effective options with the ERA, including temporary generation solutions, to meet reserve margin requirements for the summer of 2014 and until those firm capacity needs can be met.
CUC's Second Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended June 2013 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 2013 Second Quarter results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and Second 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.