Caribbean Utilities Company, Ltd. is listed for trading in
United States dollars on the
Toronto Stock Exchange.
GRAND CAYMAN, Cayman Islands, Feb. 19, 2015 /CNW/
- Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or
"the Company") announced today its unaudited results for the Fourth
Quarter and Twelve Months ended December 31,
2014 (all figures in United
States dollars).
Net earnings for the three months ended December 31, 2014 ("Fourth Quarter 2014") were
$5.4 million, a $0.4 million decrease when compared to
$5.8 million for the three months
ended December 31, 2013 ("Fourth
Quarter 2013"). This decrease is attributable to a weather-driven
3% decline in kiloWatt-hour ("kWh") sales, additional temporary
generation costs and higher consumer services expenses in the
Fourth Quarter 2014. These items were partially offset by
lower maintenance costs for the Fourth Quarter 2014 when compared
to the Fourth Quarter 2013.
Net earnings for the twelve months ended December 31, 2014 were $20.8 million, a $0.4
million increase from net earnings of $20.4 million for the twelve months ended
December 31, 2013. This increase is
attributable to a 2% kWh sales growth, lower depreciation and
maintenance expenses and higher other income. These items
were partially offset by higher consumer services expenses, driven
by a one-time adjustment to increase the Company's allowance for
doubtful accounts during the twelve months ended December 31, 2014.
For the Fourth Quarter 2014, kWh sales were 135.8 million, a
decrease of 4.5 million kWh, or 3%, when compared to 140.3 million
for the Fourth Quarter 2013. Sales were negatively impacted by
cooler weather conditions that affected customer air conditioning
usage. The average monthly temperature for the Fourth Quarter
2014 was 3.3 degrees Fahrenheit lower than the average monthly
temperature experienced during the Fourth Quarter 2013.
For the twelve months ended December 31,
2014, kWh sales were 564.2 million, an increase of 8.5
million kWh, or 2%, when compared to 555.7 million kWh for the year
ended December 31, 2013. Annual
sales were positively impacted by a 2% growth in customer
numbers. Total customers as at December 31, 2014 were 27,784, compared to 27,364
customers as at December 31,
2013.
After the adjustment for dividends on the preference shares of
the Company, earnings on Class A Ordinary Shares for the Fourth
Quarter 2014 were $4.8 million, or
$0.16 per Class A Ordinary Share, as
compared to $5.2 million, or
$0.18 per Class A Ordinary Share for
the Fourth Quarter 2013. After the adjustment for dividends on the
preference shares of the Company, earnings on Class A Ordinary
Shares for the twelve months ended December
31, 2014 were $19.9 million,
or $0.68 per Class A Ordinary Share
as compared to $19.5 million, or
$0.68 per Class A Ordinary Share for
the twelve months ended December 31,
2013. The weighted average Class A Ordinary Shares
outstanding were 29,130,536 and 28,891,552 for the twelve months
ended December 31, 2014 and
December 31, 2013,
respectively.
President and CEO, Mr. Richard
Hew, says, "In spite of the decrease in earnings and
kilowatt hour sales, the Fourth Quarter 2014 recorded overall
positive results for the Company. The announcement of CUC's winning
of the bid for firm generation as well as progress being made by
one of the renewable energy providers to develop a 5 megawatts
solar power plant, are highlights of the period under review. The
Company remains focussed on delivering a cost-effective, safe and
reliable service to its customers while at the same time improving
efficiency and managing costs."
During the Fourth Quarter 2014, the Electricity Regulatory
Authority ("ERA") announced that CUC was the successful bidder for
new generation capacity. The Company will develop and operate
a new 39.7 megawatts ("MW") diesel power plant including two 18.5
MW diesel generating units and a 2.7 MW waste heat recovery steam
turbine. The project cost is estimated at $85 million and the plant will be commissioned no
later than June 2016.
Mr. Hew added, "Over the next year, the Company will see
significant activity associated with the development of the new
diesel power plant and the waste heat recovery steam turbine. Upon
completion, the plant will boast the most fuel efficient generation
ever installed by CUC which will bring increased reliability and
lower cost to our consumers."
As a result of the Company's successful bid to supply additional
generation, in November 2014 the ERA
issued a new Generation license to the Company which replaces the
Generation Licence granted in April
2008. The 2014 Generation license will expire in November
2039. The terms and conditions of the new Generation Licence
are not materially different from the terms and conditions of the
2008 Generation Licence.
During the Fourth Quarter 2014, the ERA approved CUC's 2015-2019
Capital Investment Plan ("CIP") in the amount of $234 million, including generation expansion
costs. The ERA also approved the Company's new Customer Service
Code ("CSC"). The CSC sets out the terms and conditions of the
supply of electricity to the Company's customers, as well as the
standards for the level of service which CUC is required to provide
to its customers. The new CSC provides for an increase in various
customer service fees and the application of a Finance Charge which
will be levied on overdue customer accounts beyond 60 days. This
charge took effect on January 1,
2015.
The Company's average price per imperial gallon ("IG") of fuel
for the Fourth Quarter 2014 decreased to $4.17 from $4.70
for the Fourth Quarter 2013. The Company's average price per
IG of fuel for the twelve months ended December 31, 2014 decreased to $4.56 from $4.74
for the twelve months ended December
31, 2013.
With the price of fuel continuing to trend downwards, customers
are expected to see a reduction in their utility bills in early
2015. The average Fuel Cost Charge rate per kWh charged to
consumers for the Fourth Quarter 2014 was $0.28, a 3% decrease when compared to
$0.29 per kWh for the Fourth Quarter
2013. Additional reductions to the fuel cost charge rate per
kWh are expected to occur due to a 33% decrease in the customs
duties levied on diesel fuel imports by the Cayman Islands
Government which went into effect on January
1, 2015. CUC passes through 100% of fuel costs to
consumers on a two-month lag basis without mark-up.
CUC believes that there are economic and environmental benefits
to be derived from renewable energy sources. One of the
potential renewable energy providers, International Electric Power
("IEP"), applied for and received from the Cayman Islands Planning
Department permission to start the development of a 5MW solar power
plant. A draft Power Purchase Agreement between CUC and IEP is now
before the ERA for review.
CUC's Fourth Quarter Report for the period ended December 31, 2014 is attached to this release and
incorporated by reference and can be accessed by clicking the link
at the end of this release.
This report contains a detailed discussion of CUC's unaudited
2014 Fourth Quarter results, the Cayman
Islands economy, liquidity and capital resources, capital
expenditures and the business risks facing the Company. The release
and Fourth Quarter Report 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 report, 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 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.