Caribbean Utilities Company, Ltd. is listed for trading in
United States dollars on the
Toronto Stock Exchange
GRAND CAYMAN, Cayman Islands, May 1,
2018 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U)
("CUC" or "the Company") announced today its unaudited results for
the First Quarter ended March 31,
2018 (all dollar amounts are stated in United States dollars).
Results for the Company for the three months ending March 31, 2018 ("The First Quarter 2018") were
highlighted by a 2% increase in total customers, a 3% increase in
electricity sales and a $1.8 million
decline in net earnings, when compared to the three months ending
March 31, 2017 ("First Quarter
2017"). Renewable energy on the grid also grew by 250% from 1
million kilowatts to 3.5 million kilowatts.
Sales for the First Quarter 2018 totaled 140.4 million kilowatt
hours ("kWh"), an increase of 3.8 million kWh in comparison to
136.6 million kWh for the First Quarter 2017. Sales were positively
impacted by the 2% increase in residential customers in First
Quarter 2018 when compared to First Quarter 2017. In First
Quarter 2018, the average consumption of commercial customers
increased by 4% which also positively impacted sales. However,
revenues from large commercial customers declined due to the newly
introduced demand billing rate.
During the First Quarter 2018, Electricity Sales Revenues for
large commercial customers under the newly introduced demand rate
were less than what would have been billed under the previous
energy only rate. Management's estimate of the shortfall of
billings under the demand rate of large commercial customers is
$0.6 million or $0.02 per Class A Ordinary Share. The
introduction of the demand rates for the large commercial
customers, to be phased in over a three -year period, was intended
to be revenue neutral and, with the early indications that they are
not, the Company has written to the Utility Regulation and
Competition Office ("OfReg") to request a recovery of the shortfall
and an adjustment in the rate going forward.
Net earnings decreased $1.8
million from $4.5 million in
First Quarter 2017 to $2.7 million in
First Quarter 2018. This decrease was primarily due to the factors
impacting Operating Income which were increases in depreciation
driven by the Capital Investment Plan, higher transmission and
distribution and maintenance costs as planned in First Quarter 2018
and lower revenues from the large commercial customers. These
items were partially offset by a 3% increase in kWh sales and lower
general and administration costs. Net earnings were also
negatively impacted by a $0.1 million
increase in Finance charges in First Quarter 2018.
After the adjustment for dividends on the preference shares of
the Company, earnings on Class A Ordinary Shares for the First
Quarter 2018 were $2.6 million, or
$0.08 per Class A Ordinary Share,
compared to earnings on Class A Ordinary Shares of $4.3 million or $0.13 per Class A Ordinary Share for the First
Quarter 2017.
First Quarter 2018 saw an increase in our customer base. Total
customers as at March 31, 2018 were
29,273, an increase of 509 customers, or 2%, compared to 28,764
customers as at March 31, 2017.
President and CEO, Mr. Richard
Hew, stated, "Grand
Cayman's economy continues to grow and with the exception of
the decline in revenues due to the newly introduced demand billing
rate, the First Quarter 2018 was consistent with plan. The demand
rate is intended to be revenue neutral and the shortfall is
expected to be recovered in the future. The Company continues to
execute on its five–year $219 million
Capital Investment Plan to increase the reliability of the
electricity system and to meet the demands of the growing economy.
Capital expenditures during First Quarter 2018 totaled $8.3 million and included distribution system
extension and upgrades, generation replacement costs and LED street
lighting replacement. I am also pleased to see the growth in
renewable energy as we strive towards our goal of 25% renewable
energy on the grid by 2025. The Company remains focused on
delivering a safe, sustainable and reliable service to its
customers while at the same time improving efficiency and managing
costs."
CUC's First Quarter 2018 results and related Management's
Discussion and Analysis ("MD&A") for the period ended
March 31, 2018 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 2018 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 2018 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 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.
http://files.newswire.ca/520/CUCFSQ1.pdf
SOURCE Caribbean Utilities Company, Ltd.