CUC Announces Fourth Quarter and Twelve Month Results for the Period Ended December 31, 2011
February 07 2012 - 5:35PM
PR Newswire (Canada)
Caribbean Utilities Company, Ltd. is listed for trading in United
States dollars on the Toronto Stock Exchange under the trading
symbol "CUP.U". GRAND CAYMAN, Cayman Islands, Feb. 9, 2012 /CNW/ -
Caribbean Utilities Company, Ltd. ("CUC" or the "Company")
announced today its unaudited results for the fourth quarter and
twelve months ended December 31, 2011 (all figures in United States
dollars). Net earnings for the three months ended December 31, 2011
("Fourth Quarter 2011") were $5.1 million. This represents an
increase of 9%, or $0.4 million, from net earnings of $4.7 million
for the three months ended December 31, 2010 ("Fourth Quarter
2010"). This increase in earnings is the result of an increase in
electricity sales and a decrease in maintenance and transmission
and distribution expenses as the Company continued to focus on
reliability driven capital upgrade projects during the
period. Electricity sales were positively impacted by warmer
weather conditions during the Fourth Quarter 2011 versus the same
period last year. Overall, kilowatt- hour (kWh) sales for
2011 were flat at 554.0 million. Net earnings for the twelve months
ended December 31, 2011 were $20.4 million, representing a 3% or
$0.5 million increase from net earnings of $19.9 million for the
twelve months ended December 31, 2010. With flat kWh sales, this
increase in earnings was driven by an increase in other income and
lower financing and maintenance charges. Higher fuel prices and 4%
kWh sales growth drove operating revenues up by 22%, or $10.3
million, to $57.7 million for the Fourth Quarter 2011 as compared
to $47.4 million for the Fourth Quarter 2010. Operating
revenues increased 21%, or $38.0 million, to $218.1 million for the
twelve months ended December 31, 2011 from $180.1 million for the
twelve months ended December 31, 2010. The increase in
operating revenues was a result of higher fuel factor revenues in
2011 due to an increase in fuel prices. The average
Fuel Cost Charge rate per kWh charged to consumers for the twelve
months ended December 31, 2011 was $0.27, a 35% increase from $0.20
per kWh for the twelve months ended December 31, 2010. Actual
fuel and lubricating costs are passed on to consumers without
mark-up. After the adjustment for dividends on Class B Preference
Shares, earnings per Class A Ordinary Share for the Fourth Quarter
2011 of $0.15 was comparable to earnings per Class A Ordinary Share
for the Fourth Quarter 2010. After the adjustment for
dividends on Class B Preference Shares, earnings per Class A
Ordinary Share for 2011 was $0.68, an increase of 1% over earnings
per Class A Ordinary Share in 2010 of $0.67. Richard Hew, President
and Chief Executive Officer of the Company stated, "The year under
review has been a challenging one for CUC and the Cayman
Islands. However, the Company was able to finish the year on
a positive note with some earnings growth. This is a direct result
of steps taken to control the Company's discretionary operational
expenditures while maintaining our focus on safety, efficiency and
service reliability. We anticipate that this focus will
remain as the economy slowly emerges from this recession." Capital
expenditures for the Fourth Quarter 2011 were $10.8 million, a $5.3
million, or 96% increase from $5.5 million in capital expenditures
for the Fourth Quarter 2010. Capital expenditures for the
twelve months ended December 31, 2011 were $40.6 million, a $19.2
million, or 90% increase from $21.4 million in capital expenditures
for 2010. Excluding capital expenditures related to repair of
units damaged earlier in the year, for which the cost was covered
by insurance proceeds (net of deductible), capital expenditure
initiatives for 2011 totaled $34.0 million and included the
initiation of the Advanced Metering Infrastructure (AMI) project
roll-out and completion of the Eastern Transmission Loop. By
the second quarter of 2012 the AMI project will bring efficiencies
in meter reading and services such as disconnects and reconnects
directly from CUC's offices, provide near real-time electricity
consumption information and a 'pay as you go' payment option to aid
consumers in monitoring and controlling their electricity
consumption. The Eastern Transmission Loop project will also bring
customer benefits through an increase in the reliability and
operational flexibility of the Transmission and Distribution System
serving all areas of the island from South Sound, east to the
districts of East End and North Side. In November 2011 CUC issued a
certificate of need to the Electricity Regulatory Authority (ERA)
for 18 megawatts (MW) of new generating capacity to be installed in
2014 and for an additional 18 MW of generating capacity to be
installed in either 2015 or 2016 contingent on growth over the next
two years. The primary driver for the new generating capacity in
2014 is the upcoming retirements of several of CUC's generating
units which are reaching the end of their useful lives. As a
result of CUC expressing its need for replacement capacity, the ERA
will be conducting a competitive solicitation in 2012 in accordance
with CUC's licences which will allow all interested and qualified
parties, including CUC, to submit bids to fill the Company's firm
capacity requirement. The Company also recently conducted and
completed a competitive bidding process to fill 13 MW of non-firm
renewable energy capacity. There are currently no viable
renewable energy sources in Grand Cayman that meet CUC's
reliability requirements for firm capacity, however, CUC expects
that there are third parties that can build and maintain renewable
energy plants on the island and sell energy to CUC at a competitive
price to diesel. Mr. Hew added that, "CUC welcomes the competitive
bidding process which is being conducted by the ERA for replacement
of the retiring firm capacity and also looks forward to completing
the bid evaluations which will move the island closer to having
medium-to-large scale renewable energy sources. With the Government
projecting modest Gross Domestic Product (GDP) growth for 2011,
which impacts the rate outlook for the Company, we remain
cautiously optimistic about future growth in the economy and a
resumption of growth in electricity demand and believe the Company
is well positioned to continue to serve the island in an efficient
and reliable manner at least cost, while providing a fair return to
our shareholders." This report contains a detailed discussion of
CUC's unaudited fourth quarter financial 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 2029 and an exclusive
Electricity Transmission and Distribution Licence expiring in
2028. Further information is available at www.cuc-cayman.com.
CUC includes forward-looking statements in this material.
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 Management's Discussion and
Analysis for the twelve month period ended December 31, 2010, 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. PDF with
caption: "CUC's Fourth Quarter Report for the period ended December
31, 2011 can be accessed by clicking the link below.". PDF
available at:
http://stream1.newswire.ca/media/2012/02/09/20120209_C3082_DOC_EN_9981.pdf
Caribbean Utilities Company, Ltd. CONTACT: Letitia LawrenceVice
President Finance and Chief Financial OfficerPhone: (345)
914-1124E-Mail: llawrence@cuc.ky
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