Caribbean Utilities Company, Ltd. is listed for trading in
United States dollars on the
Toronto Stock Exchange
GRAND CAYMAN, Cayman Islands, May 7,
2013 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U)
("CUC" or "the Company") announced today its unaudited results for
the First Quarter ended March
31st 2013 (all figures in United States dollars).
Despite continuing declines in kilowatt-hour
("kWh") sales, CUC's earnings for the three months ended
March 31, 2013 ("First Quarter 2013")
improved over the same period last year as the Company continued
its focus on controlling costs and improving efficiencies
throughout the organization.
Net earnings for the First Quarter 2013 totalled
$2.9 million, an increase of
$1.0 million, or 53%, when compared
to $1.9 million for the three months
ended March 31, 2012 ("First Quarter
2012"). This increase was due primarily to lower general and
administration and financing costs as well as an increase in other
income. General and administrative expenses for the First
Quarter 2012 included a one-time charge of $0.3 million related to restructuring costs
incurred to further streamline CUC's organizational
structure. Maintenance costs also declined as a result of the
ongoing capital-related projects that upgrade and improve the
performance of the Company's fleet of generating units.
These items were partially offset by a 1%
decline in kilowatt-hour (kWh) sales and higher depreciation costs
for the First Quarter 2013 when compared to the First Quarter
2012.
After the adjustment for dividends on the
preference shares of the Company, earnings on Class A Ordinary
Shares for the First Quarter 2013 were $2.8
million, or $0.10 per Class A
Ordinary Share, an increase of $1.0
million when compared to $1.8
million, or $0.06 per Class A
Ordinary Share for the First Quarter 2012.
Kilowatt- hour sales for the First Quarter 2013
totalled 125.5.million kWh, which is a decrease of 0.9 million kWh,
or 1% when compared to 126.4 million kWh for the First Quarter of
2012.
President and CEO, Mr. Richard Hew, says, "With a weak economy and high
fuel costs, customers continue to conserve energy. The Company
remained focused on controlling its operating costs while investing
in required infrastructure to meet current and future demand as
needed. CUC has been making every effort to ensure that its
customers are provided with a safe and reliable electricity service
at least cost."
Capital expenditures for the First Quarter 2013
were $6.4 million and system
reliability was recorded at 99.97%.
A Certificate of Need for generation capacity
was issued to the Electricity Regulatory Authority ("ERA") by the
Company in November 2011. This was
driven primarily by the upcoming retirements of some of the
Company's generating units beginning in 2014.
In March 2012, the
ERA solicited Request for Proposals (RFP) for an additional 36
megawatts ("MW") of generation capacity from qualified bidders,
including CUC. In February
2013, the Company was advised that another local company,
DECCO Ltd., had won the bid.
In April 2013, the
ERA announced that it would be engaging an independent party to
conduct an investigation into the 36 MW bid process following
public statements being made by its former managing director
concerning alleged irregularities with the process.
Mr. Hew stated, "The Company is becoming
increasingly concerned that the ongoing delays in the process to
secure firm generating capacity may lead to inadequate installed
generation capacity, given that 18 MW of the 36 MW of capacity was
intended to have been installed for July
2014 to serve the needs of Grand
Cayman. However, we will explore all options, including
temporary generation solutions to mitigate the threat of extended
power outages for the summer of 2014."
During the quarter under review the Company also
continued discussions with prospective providers of alternative
energy in the areas of solar and wind. Once the negotiations are
completed and agreements have been reached with all parties, an
announcement will be made.
Mr. Hew added "The addition of renewable sources
will not allay concerns regarding reliability as these sources are
not considered firm capacity. However, we believe there are
economic and environmental benefits to engage renewable energy
sources to displace some of the diesel fuel that our generators
presently consume."
CUC's First Quarter results and related
Management's Discussion and Analysis ("MD&A") for the period
ended March 31st 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 First Quarter results, the
Cayman Islands economy, liquidity
and capital resources, capital expenditures and the business risks
facing the Company. The release and First 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.
PDF available at:
http://stream1.newswire.ca/media/2013/05/07/20130507_C4563_DOC_EN_26477.pdf