CUC Announces Fourth Quarter and Twelve Month Results for the
Period Ended December 31, 2012
Caribbean Utilities Company, Ltd. is listed for trading in
United States dollars on the
Toronto Stock Exchange.
GRAND CAYMAN, Cayman Islands, Feb. 7,
2013 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U)
("CUC" or "the Company") announced today its unaudited results for
the Fourth Quarter ended December
31st 2012 (all figures in United States dollars).
Net earnings for the three months ended
December 31, 2012 ("Fourth Quarter
2012") were $4.1 million, a 20% or
$1.0 million decrease when compared
to $5.1 million for the three months
ended December 31, 2011 ("Fourth
Quarter 2011"). This decrease in earnings is the result of higher
depreciation and transmission and distribution costs for the Fourth
Quarter 2012 when compared to the Fourth Quarter 2011.
Net earnings for the twelve months ended
December 31, 2012 were $17.7 million, representing a 13% or $2.7 million decrease from net earnings of
$20.4 million for the twelve months
ended December 31, 2011. This
decrease in earnings was driven by a 1% decline in kilowatt-hour
("kWh") sales and higher depreciation, transmission and
distribution, financing and general and administrative charges.
The temporary cessation of depreciation on two
damaged generating units resulted in reduced costs for the twelve
months ended December 31, 2011.
Depreciation expense recommenced on both units in 2012.Increased
general and administration expenses for the twelve months ended
December 31, 2012 were the result of
higher costs associated with the Company's defined benefit
plans.
These items were partially offset by lower
maintenance costs for the twelve months ended December 31, 2012 as the Company continued its
focus on efficiency and reliability capital upgrade projects. CUC's
Average Service Availability Index, a key measure of system
reliability, was recorded at 99.96% for 2012.
KWh sales for the Fourth Quarter 2012 were 132.4
million, comparable to 132.6 million for the Fourth Quarter 2011.
KiloWatt-hour sales for the twelve months ended December 31, 2012 were 547.8 million kWh, a
decrease of 6.2 million or 1% when compared to 554.0 million for
the year ended December 31,
2011. Sales were negatively impacted by cooler weather
conditions which affected customer air conditioning usage.
The average temperature for 2012 was 81.9 degrees Fahrenheit
compared to 82.3 degrees for 2011.
Electricity sales revenue increased $0.1 million, or 1%, in the Fourth Quarter 2012
to $16.8 million when compared to
electricity sales revenues of $16.7
million for the Fourth Quarter 2011 due to the base rate
increase of 0.7% which took effect in June
2012. Electricity sales revenue decreased $0.5 million, in the twelve months ended
December 31, 2012 to $69.1 million when compared to electricity sales
revenues of $69.6 million for the
twelve months ended December 31,
2011. Electricity sales revenues for the year ended
December 31, 2012 were primarily
lower as a result of cooler, wetter weather conditions and
continued weak economic conditions.
Higher fuel prices and higher fuel factor
revenues drove operating revenues up by 2%, or $1.4 million, to $59.1
million for the Fourth Quarter 2012 from $57.7 million for the Fourth Quarter 2011.
Similarly, operating revenues increased 2%, or $5.5 million, to $223.5
million for the twelve months ended December 31, 2012 from $218.1 million for the twelve months ended
December 31, 2011. While fuel
prices were stable during the twelve months ended December 31, 2012, they remain relatively high
and as a result, customers continue to conserve their energy
usage.
Total customers as at December 31, 2012 were 27,035, an increase of 1%
compared to 26,636 customers as at December
31, 2011. The Company connected 141 customers for the three
month period ended December 31, 2012
comprising 123 residential customers and 18 commercial
customers.
After the adjustment for dividends on the
preference shares of the Company, earnings on Class A Ordinary
Shares for the Fourth Quarter 2012 were $3.5
million, or $0.12 per Class A
Ordinary Share, as compared to $4.5
million, or $0.15 per Class A
Ordinary Share for the Fourth Quarter 2011. 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, 2012 were $16.8 million, or $0.58 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, 2011.
Richard Hew,
President and Chief Executive Officer of the Company stated, "The
year 2012 was the third consecutive year without appreciable growth
in electricity sales for CUC. Although there are some signs of weak
economic growth reflected in the small increases in customer
connections, any positive impact on sales is being offset by
increased energy efficiency in new commercial buildings and by
residential consumer conservation. The Company continues to
focus on controlling discretionary expenditures, while maintaining
a safe, efficient and reliable service to customers. However,
improvements in electricity sales and earnings continue to hinge on
the return of growth in the local economy. "
Capital expenditures for the Fourth Quarter 2012
were $9.2 million, a $0.7 million, or 7% decrease from $9.9 million in capital expenditures for the
Fourth Quarter 2011. Capital expenditures for the twelve months
ended December 31, 2012 were
$30.8 million, an $8.8 million, or 22% decrease from $39.6 million in capital expenditures for
2011.
Capital expenditures for 2011 included the
repair of units damaged during that year for which the cost was
covered by insurance proceeds (net of deductible). Excluding these
costs, capital expenditure initiatives for 2011 totaled
$34.0 million.
During the period under review the Company
started the roll out of its Advanced Metering Infrastructure (AMI)
project. This project will bring efficiencies in the meter reading
and services such as disconnects and reconnects directly from CUC's
offices, provide real-time electricity consumption information and
a 'pay as you go' payment option to assist consumers with
monitoring and controlling their electricity consumption.
The Company has also completed the Eastern
Transmission Loop. This 69 KV Loop is intended to minimize the
number and duration of outages and will improve reliability levels
in the Eastern part of the island.
In August 2011,
the Company initiated a competitive bidding process to fill 13 MW
of non-firm renewable energy capacity. Extensive negotiations with
two leading bidders have been conducted and agreement has been
reached with one bidder on the significant terms and milestones
leading to the execution of a binding power purchase agreement,
subject to regulatory approval. CUC anticipates agreeing
terms on a similar basis with the second bidder in the first
quarter of 2013. Pursuant to these agreements CUC anticipates
purchasing renewable energy at competitive prices from large scale
renewable energy facilities by late 2014.
In early 2012 the Electricity Regulatory
Authority ("ERA") solicited Request for Proposals (RFP) for
additional generation capacity from 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 during the first
quarter of 2013 to meet the projected commissioning date of
July 2014.
CUC's Fourth Quarter Report for the period ended
December 31, 2012 is attached to this
release. 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, 2011, 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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