Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange
GRAND CAYMAN, Cayman Islands, Nov. 1, 2012 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the Third Quarter ended September 30th 2012 (all figures in United States dollars).
Net earnings for the three months ended September 30, 2012 ("Third Quarter 2012") totalled $6.6 million, an increase of $0.3 million, or 5%, when compared to $6.3 million for the three months ended September 30, 2011 ("Third Quarter 2011"). Lower finance charges and an increase in other income were partially offset by a 1% decline in kilowatt-hour (kWh) sales and higher depreciation costs for the Third Quarter 2012 when compared to the Third Quarter 2011.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the Third Quarter 2012 were $6.5 million, an increase of $0.4 million, or 7%, from $6.1 million, for the Third Quarter 2011. Earnings per Class A Ordinary Share for the Third Quarter 2012 were $0.22, comparable to Earnings per Class A Ordinary Share for the Third Quarter 2011.
Net earnings for the nine months ended September 30, 2012 decreased by 11% to $13.6 million from $15.3 million for the same period in 2011. Earnings per Class A Ordinary Share for the nine months ended September 30, 2012 were $0.46, down from $0.53 per Class A Share for the same period last year. This decline was driven by higher depreciation costs and a 1% decline in kWh sales.
President and CEO, Mr. Richard Hew, says, "Electricity sales for this quarter and earnings year to date were negatively impacted by the continuing weak economy, relatively high fuel prices and wetter than normal months. However, despite these circumstances, the Company continues to meet its obligations of providing a safe, reliable and efficient service to the residents of Grand Cayman while providing a reasonable return to shareholders through prudent management of its resources."
The Company's reliability as measured by the Average System Availability Index was 99.95% for Third Quarter 2012 reflecting the percentage of time power is available to customers. Capital expenditures for the nine months ended September 30, 2012 totaled $21.6 million including $8.5 million for Distribution System upgrades, $4.1 million for Generation Asset upgrades and $2.5 million for the Company's Advanced Metering Infrastructure ("AMI") system.
The installation of the new AMI system continued over the quarter under review. Over seven thousand, four hundred new meters have already been installed. The AMI system allows CUC to measure, collect and analyze energy usage more effectively, to communicate directly with metering services such as electricity meters, either on request or on a schedule, and to shorten the delivery time for various customer services. The AMI project is expected to be completed in the first quarter of 2014.
Earlier this year, the Electricity Regulatory Authority ("ERA") solicited Request for Proposals (RFP) for additional generation capacity from six Qualified Bidders (including CUC). CUC submitted its bid on July 16, 2012. This competitive solicitation process is in response to the certificate of need issued by the Company in November 2011, driven primarily by the upcoming retirements of some of the Company's generating units. The projected date for 18 MW of additional generation capacity is July 2014, with a second increment of 18 MW of capacity required up to three years later in 2017 with timing dependent on economic growth and development of the Grand Cayman economy and the related growth in demand for electricity. The ERA's selection of the successful bidder is expected before the end of 2012 to meet the projected commissioning date of July 2014.
CUC's Third Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended September 2012 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 2012 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.