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, Oct. 28, 2022 /CNW/ - Caribbean Utilities
Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today
its unaudited results for the three and nine months ended
September 30, 2022 (all dollar
amounts are stated in United
States dollars).
The results for the Company for the three months ended
September 30, 2022 ("Third Quarter
2022" or "Q3 2022") show growing customer numbers and energy sales,
but with lower average consumption by residential customers in the
face of high fuel prices. The Company successfully facilitated a
Cayman Islands Government Fuel Cost Relief programme to assist
residential customers. Depreciation charges increased for the
quarter related to the Seven Mile Beach and Prospect Substations
and other growth-related capital projects coming into service.
Reliability and safety results were as planned and the Company
endured Tropical Storm Ian with minimal physical damage. Earnings
increased marginally for the quarter over the same period last
year.
A highlight of the Third Quarter 2022 was the signing of an
agreement with the technology group Wärtsilä. Wärtsilä will
supply two 10-megawatt /10 megawatt-hour energy storage systems to
CUC. This project is primarily designed to reduce the online or
spinning reserve requirement presently provided by diesel engines
and will improved fuel efficiency by approximately 6%, with a
corresponding reduction in CO2 emissions. This is CUC's
first energy storage facility and it will also enable the Company
to increase the amount of intermittent renewable energy connected
to the grid on Grand Cayman while
improving grid stability, reliability and power quality.
During Third Quarter 2022, as part of the Company's ongoing
restructuring programme, CUC announced the promotion of four
Caymanians to its management team. CUC also released its first
Sustainability report which discusses programmes that demonstrate
CUC's commitment to the high standards in Environmental, Social and
Governance initiatives.
Global fuel prices continued to rise in the third quarter
impacting CUC's fuel costs. Power generation expenses for Q3 2022
totalled $52.4 million, an increase
of 70% compared to power generation expenses of $30.8 million for the three months ended
September 30, 2021 ("Third Quarter
2021" or "Q3 2021"). This is primarily due to the 75% increase in
the average fuel price per imperial gallon during Q3 2022 in
comparison to Q3 2021). The average Fuel Cost Charge rate billed to
consumers for Q3 2022 was $0.29 per
kilowatt-hours ("kWh"), compared to the average Fuel Cost Charge
rate of $0.17 per kWh for Q3 2021.
CUC passes through all fuel costs and renewable costs to consumers
on a two-month lag basis with no mark-up. The Company continues to
provide information to customers on ways to manage their energy
consumption.
Net earnings for Q3 2022 totalled $10.4
million, an increase of $0.3
million or 3% in comparison to $10.1
million Q3 2021. This was due to the increase in kWh sales
by 2% and the customer growth of 3%. The net earnings during
Q3 2022 were positively impacted by the decrease of transmission
and distribution costs and higher foreign exchange gains and
negatively impacted by increase in depreciation expense, general
and administration cost and higher finance charges.
After the adjustment for dividends on the preference shares of
the Company, earnings on Class A Ordinary Shares for Q3 2022
totalled $10.3 million, or
$0.28 per Class A Ordinary Share, in
comparison to earnings of $10.0
million, or $0.26 per Class A
Ordinary Share for Q3 2021.
Net earnings for the nine months ended September 30, 2022 totalled $24.2 million, an increase of $2.2 million or 10% when compared to net earnings
of $22.0 million for the nine months
ended September 30, 2021.
After the adjustment for dividends on the preference shares of
the Company, earnings on Class A Ordinary Shares for the nine
months ended September 30, 2022
totalled $23.9 million, or
$0.64 per Class A Ordinary Share, in
comparison to earnings on Class A Ordinary Shares of $21.7 million, or $0.58 per Class A Ordinary Share, for the nine
months ended September 30, 2021.
Sales for Q3 2022 totalled 184.0 million kWh, an increase of 4.1
million kWh or 2% in comparison to 179.9 million kWh for Q3
2021. The increase in sales was driven by the higher
commercial customer sales in Q3 2022 compared to Q3 2021 and the 3%
increase in customer numbers between Q3 2022 and Q3 2021.
Sales in kWh for the nine months ended September 30, 2022 totalled 504.6 million kWh, an
increase of 10.1 million kWh or 2% in comparison to 494.5 million
kWh for the nine months ended September 30,
2021. The increase in sales is primarily due to a 3%
growth in overall customer numbers for the nine months ended
September 30, 2022 compared to the
nine months ended September 30, 2021.
The number of customers at the end of September 30, 2022 was 32,865, an increase of 901
customers, or 3%, compared to 31,964 customers as at September 30, 2021.
During Q3 2022, the Company recorded a new system peak load of
113.573 megawatts.
President and CEO, Mr. Richard
Hew, stated, "The state of the current global fuel markets
emphasizes the need and our desire to advance activities under the
Integrated Resource Plan as quickly as possible, particularly
utility scale solar projects, to transition to more sustainable
energy solutions that bring price stability and reduce carbon
emissions. Tropical Storm Ian also reminds us of the importance of
building resilient systems such as our indoor substations to adapt
to more frequent storms brought by climate change."
CUC's Third Quarter 2022 results and related Management's
Discussion and Analysis ("MD&A") for the period ended
September 30, 2022 are incorporated
by reference.
The MD&A section of this report contains a discussion of
CUC's unaudited 2022 Third Quarter results, the Cayman Islands economy, liquidity and capital
resources, capital expenditures and the business risks facing the
Company. The release and Third Quarter 2022 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.
SOURCE Caribbean Utilities Company, Ltd.