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, July
31, 2024 /CNW/ - Caribbean Utilities Company, Ltd.
("CUC" or the "Company") has announced its consolidated unaudited
results for the three and six months ended June 30, 2024. The following are key highlights
(all figures stated in United
States Dollars).
Capital Expenditures
The Company invested $44.0 million
in the first half of 2024 on projects with various objectives
including grid resiliency, upgrading generation assets, and
supporting the transition to lower carbon energy. These projects
included distribution system extensions and upgrades, generation
replacements, lifecycle upgrades, alternative energy technologies,
installation of Battery Energy Storage Systems ("BESS"), and
facility and auxiliary asset replacements.
The resiliency investments by the Company proved successful
following the passing of Hurricane Beryl. The Company was able to
successfully restore electricity service to all impacted customers
within approximately 24 hours of the all clear being issued.
Sustainability Initiatives
In April 2024, the Cayman Islands
Government approved the 2024-2045 National Energy Policy ("NEP").
The NEP establishes a framework by which all stakeholders can
identify objectives for the achievement of the territory's energy
goals, including the imperative need to reduce greenhouse gas
emissions. The revised NEP focuses on renewable energy, energy
conservation methods and the promotion of energy efficiency.
CUC aligns with the NEP and the commitment to sustainability and
carbon reduction through the following projects:
Liquid Natural Gas ("LNG") Procurement Strategy: The
Company has completed the strategy for Liquid Natural Gas as a
transitional fuel and has presented it to stakeholders, in
preparation for the Request for Proposal stage. LNG use will assist
Grand Cayman to achieve emissions
reduction targets set out by the NEP by reducing CO2 output by
40%.
Future Projects: The Company submitted a Certificate of
Need ("CON") for consideration by the regulator comprised of 100 MW
of solar plus storage and 36.1 MW of thermal generation by
June 1, 2027. This initiative aligns
with the 2024-2045 NEP, which aims to reduce greenhouse gas
emissions and achieve 39% renewable energy penetration by 2027 and
reduce emissions by 28% (in comparison with 2019).
Community and Industry Recognition
In April 2024, the Company
established its Green Financing Framework ("Framework") which was
assessed by a second-party opinion provider, Sustainable Fitch, as
"Excellent" on the scale of Not Aligned, Aligned, Good and
Excellent. This endorsement underscores the Framework's
robustness and the Company's dedication to transparency and
accountability in its environmental initiatives. Proceeds from
transactions under the Framework can be allocated to four
categories: renewable energy, energy efficiency, climate change
adaptation, and clean transportation.
Subsequently, on May 15, 2024, CUC
announced the closing of a US$80
million of Senior Unsecured Notes (the "Notes") consisting
of US$40 million 6.17% Senior
Unsecured Green Notes due May 15,
2039, US$10 million 6.37%
Senior Unsecured Green Notes due May 15,
2049, and US$30 million 6.37%
Senior Unsecured Notes due May 15,
2049.
This offering marked the Company's inaugural release of notes
under the Framework and was also the premier instance of a green
bond issuance by a corporate entity in the Cayman Islands to date. The Company plans to
allocate $50 million of the net
proceeds from these Notes to fund or refinance new and existing
qualifying green initiatives.
Financial Performance
- Net Earnings for the three months ended June 30, 2024 ("Second Quarter 2024" or "Q2
2024") totaled $10.1 million, 1%
increase compared to the three months ended June 30, 2023 ("Second Quarter 2023" or "Q2
2023").
- Net earnings for the six months ended June 30, 2024, were $16.3
million, a $1.1 million
increase from net earnings of $15.2
million for the six months ended June
30, 2023.
- 5% increase in kilowatt-hour ("kWh") sales when compared to Q2
2023.
- 2% increase in total customers when compared to Q2 2023.
Net Earnings and Sales Revenues
Net earnings for Q2 2024 were $10.1
million, a $0.1 million
increase when compared to net earnings of $10.0 million for Q2 2023. After adjusting for
dividends on the preference shares of the Company, earnings on
Class A Ordinary Shares for Q2 2024 were $10.0 million, or $0.26 per share, compared to $9.9 million, or $0.26 per share for Q2 2023.
Sales in kWh for Q2 2024 were 194.8 million kWh, a 5% increase
(9.6 million kWh) from Q2 2023. This increase was due to a 2%
growth in customer numbers. The average temperature for Q2 2024 was
84.7 degrees Fahrenheit, higher than the average temperature of
84.5 degrees Fahrenheit in Q2 2023, contributing to increased
consumption by customers.
Fuel factor and renewable energy costs are passed through to
customers without any markup. The Fuel Factor consists of charges
from diesel fuel and lubricating oil costs, which are passed
through to consumers on a two-month lag basis. The average
Fuel Cost Charge rate for Q2 2024 was $0.23 per kWh, compared to the $0.24 per kWh in Q2 2023. In Q2 2024, the
fuel cost charge accounted for approximately 58% of the customer
bill.
"The Company continues to focus on our capital investment and
infrastructure projects with an emphasis on sustainability. The
lifecycle upgrades to our MAN engines will increase fuel efficiency
and allow for cost savings for our customers. The most recent
submission of a certificate of need to the regulator requesting 100
MW of solar plus storage demonstrates our Company's commitment to
the reduction of emissions and to deliver least cost energy for the
people of Grand
Cayman," said Mr. Richard
Hew, President and Chief Executive
Officer.
Additional Information
CUC's Second Quarter 2024 results and related Management's
Discussion and Analysis ("MD&A") are attached to this release
and incorporated by reference. The MD&A section of this
report contains a discussion of CUC's unaudited Second Quarter 2024
results, the Cayman Islands
economy, liquidity and capital resources, capital expenditures and
the business risks facing the Company. The release and the Second
Quarter 2024 MD&A can be accessed at www.cuc-cayman.com
(Investor Relations/Press Releases) and at
www.sedarplus.ca.
The principal activity of the Company is to generate, transmit
and distribute electricity in its licence area of Grand Cayman, Cayman
Islands, pursuant to a 20-year Transmission &
Distribution ("T&D") Licence and a 25-year non-exclusive
Generation Licence (the "Generation License" and together with the
T&D Licence, the "Licences") granted by the Cayman Islands
Government (the "Government", "CIG"). The T&D Licence, which
expires in April 2028, contains
provisions for an automatic 20-year renewal and the Company has
reasonable expectation of renewal until April 2048. The Generation Licence expires in
November 2039. 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.