Caribbean Utilities Company, Ltd. is listed for trading in
United States dollars on the
Toronto Stock Exchange.
GRAND CAYMAN, Cayman Islands, May 3,
2016 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U)
("CUC" or "the Company") announced today its unaudited results for
the First Quarter ended March 31 2016
(all figures in United States
dollars).
Sales for the three months ended March
31, 2016 ("First Quarter 2016") totalled 135.6 million
kilowatt-hour ("kWh"), an increase of 6.6 million kWh in comparison
to 129.0 million kWh for the three months ended March 31, 2015 ("First Quarter 2015"). This 5%
sales growth was driven by warmer weather conditions and an
increase in customer numbers.
Operating income for First Quarter 2016 totalled $5.1 million, an increase of $0.6 million when compared to operating income of
$4.5 million for First Quarter
2015. The increase is attributable to the 5% kWh sales growth
and lower general and administration costs. These items were
partially offset by higher depreciation, maintenance and
amortization costs.
In addition to the factors positively impacting operating
income, net earnings increased as a result of higher capitalization
of interest expenses through the Allowance for Funds Used During
Construction ("AFUDC") of $1.9
million in First Quarter 2016 when compared to $0.9 million in First Quarter 2015. The
increase in AFUDC, and resulting reduction in Finance Charges, is
due primarily to the Company's ongoing 39.7 MW Generation
Project. AFUDC is the capitalisation of Financing Cost which
is calculated by multiplying the Company's Cost of Capital rate by
the average construction work in progress for each month.
Net Earnings for the First Quarter 2016 totalled $5.0 million, an increase of $1.7 million when compared to net earnings of
$3.3 million for the First Quarter
2015.
After the adjustment for dividends on the preference shares of
the Company, earnings on Class A Ordinary Shares for the First
Quarter 2016 were $4.9 million, or
$0.15 per Class A Ordinary Share,
compared to earnings on Class A Ordinary Shares of $3.2 million or $0.11 per Class A Ordinary Share for the First
Quarter 2015.
The average monthly temperature for the First Quarter 2016 was
80.2 degrees Fahrenheit as compared to an average monthly
temperature of 79.5 degrees for First Quarter 2015. Warmer
temperatures increase air conditioning load which can positively
impact the Company's sales.
During the First Quarter 2016, there was an increase in the
number of customers connected to the CUC grid. The total
number of customers as at March 31,
2016 was 28,332, an increase of 459 customers, or 2%,
compared to 27,873 customers as at March 31,
2015.
Capital expenditures for the three months ended March 31, 2016 were $10.6
million, a $3.5 million, or
49% increase from $7.1 million in
capital expenditures for the three months ended March 31, 2015. This increase in capital
expenditures is driven by costs associated with the Company's 39.7
MW generation project.
The Company is currently in the commissioning phase of the two
new engines for the Generation Project and it is expected that the
units will be fully commissioned in June
2016. The new engine room houses two 18.5 megawatts ("MW")
diesel generating units, one 2.7 MW waste heat recovery steam
turbine and associated auxiliary equipment. The project cost
is estimated at $85 million and will
be the most efficient fuel plant of its kind in the region when
completed.
President and CEO, Mr. Richard
Hew, says, "The First Quarter of 2016 has been a good one
for the Company. We remained focused on becoming a more efficient
company and on meeting the future energy needs of Grand Cayman. During this Quarter our
customers continued to benefit from lower electricity bills, our
new generating plant has progressed to the commissioning stage and
significant progress has been made to increase our renewable energy
options."
Reliability of service to our customers is a key objective for
our Company and it is critical to the continuing growth of
Grand Cayman. The Company remains
committed to meeting the challenges which come with providing a
highly reliable service on a small island system such as what we
have in Grand Cayman. The CUC
system Average Availability Index was 99.90% during First Quarter
2016.
With the reduction in world fuel market prices and the
30 cents Government reduction in fuel
duty, customers benefited from significantly reduced electricity
costs during the First Quarter 2016. The residential consumer who
used 1,000 kWh per month would have seen their monthly bills
decline by approximately CI$68 during the First Quarter 2016 when
compared to the same period in 2015.
While current fuel prices are low historically, the world fuel
market has been volatile therefore the Company's efforts to connect
other stable and competitively priced energy options to the grid
have not been deterred.
The 5 MW Solar Project at Bodden Town is progressing as planned
with ground-breaking by the developer, Entropy Cayman Solar
Limited, scheduled for early May and planned commercial operation
by the end of 2016. The Company anticipates further renewable
energy sources will be connected to the grid, with a Request for
Proposal ("RFP") for renewable energy being conducted by the
Electricity Regulatory Authority ("ERA") in the near future.
The Company remains committed to using the latest technologies
to increase efficiencies within the business. At the end of First
Quarter 2016, the Company had installed over 15,000 meters as part
of the Advanced Metering Infrastructure ("AMI") project.
The AMI project is expected to be completed in July 2016 and provides real-time consumption
information, and brings efficiencies to meter reading as well as
other services. It will also offer a pay- as- you-go payment option
which will help customers to monitor and control their electricity
consumption.
CUC's First Quarter results and related Management's Discussion
and Analysis ("MD&A") for the period ended March 31 2016
are attached to this release and incorporated by reference and can
be accessed by clicking the link at the end of this release.
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 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.