CUC Announces Third Quarter Results for the Period Ended September 30th, 2013
Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange
GRAND CAYMAN, Cayman Islands, Nov. 1, 2013 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the Third Quarter ended September 30th 2013 (all figures in United States dollars).
Net earnings for the three months ended September 30, 2013 ("Third Quarter 2013") totalled $6.0 million, a decrease of $0.6 million when compared to $6.6 million for the three months ended September 30, 2012 ("Third Quarter 2012"). This decrease was due primarily to higher depreciation and finance charges and flat electricity sales revenues. These items were partially offset by lower general and administration and maintenance costs. Maintenance costs declined due to the nature of certain scheduled capital projects for 2013 which are deemed to result in upgrades that extend the life or increase the output of generating units.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the Third Quarter 2013 were $5.9 million, or $0.21 per Class A Ordinary Share, a decrease of $0.6 million from the $6.5 million, or $0.22 per Class A Ordinary Share for the Third Quarter 2012.
Sales for the Third Quarter 2013 totalled 145.7 million kiloWatt ("kWh"), a decrease of 3.4 million kWh in comparison to 149.1 million kWh for the Third Quarter 2012. Third Quarter 2013 kWh sales were negatively impacted by a reduction in customer air conditioning load due to wetter weather conditions, when compared to the same period last year. The average monthly rainfall for the Third Quarter 2013 was 7.6 inches as compared to average monthly rainfall of 6.5 inches for Third Quarter 2012.
Total customers as at September 30, 2013 were 27,176, an increase of 282 customers, or 1%, compared to 26,894 customers as at September 30, 2012. Customer numbers continue to grow but at a slower rate when compared to recent quarters.
President and CEO, Mr. Richard Hew, says, "Flat sales combined with higher finance and depreciation charges stemming from our long-term commitment to investment in infrastructure which is required to provide a safe and reliable service, produced a decline in earnings when compared to the same quarter last year. Despite this short term decline, earnings for the the nine months ended September 30, 2013 remain ahead of earnings for the same period in 2012. The Company maintains a positive outlook for an improved economy in the future.
Net earnings for the nine months ended September 30, 2013 were $14.7 million, an increase of $1.1 million when compared to net earnings of $13.6 million for the nine months ended September 30, 2012.
In July 2013, the Electricity Regulatory Authority ("ERA") announced its decision to cancel the solicitation process for firm generating capacity that was being sought for installation in 2014. In October 2013, the Company and the ERA agreed to a temporary generation plan in order to meet the reserve margin requirements for the summer of 2014 and until those firm capacity needs can be met.
The Company believes that there are economic and environmental benefits to be derived from the use of renewable energy sources in place of some of the diesel fuel presently used in our generators. During the period under review, the Company continued its discussions with New Generation Power ("NGP") and International Electric Power ("IEP"), two U.S. based renewable energy developers selected through a solicitation process to provide renewable energy to CUC's grid under power purchase agreements.
During the period under review, the Company won two of the top awards at the Caribbean Electric Utility Services Corporation ("CARILEC") 2012 Benchmarking Awards. The award for Best Performance in Transmission and Distribution Services was given based on CUC's regional leading performance in efficiency, productivity, reliability and cost effectiveness. The second award was for Best in Performance in Commercialization Services and was based on customer service quality, cost effectiveness and productivity. Participants were evaluated for these awards based on their performances in the 2012 Traditional Benchmark Study.
CUC's Third Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended September 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 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.
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