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 28, 2022 /CNW/ - Caribbean Utilities
Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today
its unaudited results for the three and six months ended
June 30, 2022 (all dollar amounts are
stated in United States
dollars).
Caribbean Utilities Company, Ltd. (CUC) will participate in the
upcoming solicitation for utility-scale renewable energy to be
conducted by the regulator. This is part of the Company's
activities under the Integrated Resource Plan that will transform
the energy sector in Grand Cayman
and 'green' CUC's grid.
In April 2022, The Utility
Regulation and Competition Office ("OfReg") issued a Request for
Qualification ("RFQ") for the Renewable Energy Auction Scheme
("REAS") Competition Round 1. The REAS Round 1 is intended to
select a party, or parties, to operate and maintain Solar
Photovoltaic Plants and Energy Storage up to 100MW with 60MW
Battery Energy Storage System Facility. OfReg also issued an RFQ
for a solar plus storage 23MW Dispatchable Photovoltaic Generation
plant facility.
The Company has received approval from OfReg for a 20 MW battery
which will assist the diesel generators with grid stability during
loss of generation and also reduce fuel consumption. This project
is under way and it is anticipated to come online in late 2023.
In May 2022, Standard & Poors
("S&P") revised its rating of the Company to stable from
negative BBB+ due to consistent financial performance. Despite the
pandemic, which negatively affected Cayman's tourism industry,
CUC's financial measures have consistently remained above S&P's
downgrade threshold.
The financial results for the Company for the three months
ending June 30, 2022 ("Second Quarter
2022" or "Q2 2022") reflect the ongoing economic recovery following
the COVID -19 pandemic. During this period the Company recorded an
increase in sales as well as an increase in its customer base.
Net earnings for Q2 2022 totalled $8.3
million, a decrease of $0.3
million compared to $8.6
million for Q2 2021. Net earnings for the quarter were
negatively impacted by an increase in general and administration
expenses, customer services cost and depreciation. These
factors were partially offset by an increase in electricity sales
revenues. After the adjustment for dividends on the preference
shares of the Company, earnings on Class A Ordinary Shares for Q2
2022 totalled $8.2 million, or
$0.22 per Class A Ordinary Share,
compared to earnings of $8.4 million,
or $0.23 per Class A Ordinary Share
in Q2 2021.
Net earnings for the six months ended June 30, 2022 totalled $13.8 million, an increase of $1.9 million or 16% when compared to net earnings
of $11.9 million for the six months
ended June 30, 2021. After the
adjustment for dividends on the preference shares of the Company,
earnings on Class A Ordinary Shares for the six months ended
June 30, 2022 were $13.6 million, or $0.36 per Class A Ordinary Share, compared to
earnings on Class A Ordinary Shares of $11.7
million, or $0.32 per Class A
Ordinary Share, for the six months ended June 30, 2021.
Sales for Q2 2022 totalled 171.3 million kWh, an increase
of 0.5 million kWh in comparison to 170.8 million kWh for Q2
2021.
Sales for the six months ended June 30,
2022 ("Second Quarter 2022" or "Q2 2022") totalled 320.7
million kWh, an increase of 6.1 million kWh in comparison to 314.6
million kWh for the six months ended June
30, 2021 ("Second Quarter 2021" or "Q2 2021"). The
increase in sales for Q2 2022 is primarily due to a 2% increase in
kWh consumption across all customer categories and a 3% growth in
overall customer numbers for Q2 2022 compared to Q2 2021.
There was an increase in the total customers as at June 30, 2022. The number of customers at the end
of the Second Quarter 2022 was 32,553, an increase of 834
customers, or 3%, compared to 31,719 customers as at June 30, 2021.
Volatile fuel prices continue to present a challenge for the
Company and its customers.
Fuel factor revenues for Q2 2022 totalled $30.9 million, an increase of $9.5 million, compared to fuel factor revenues of
$21.4 million for Q2 2021. This is
primarily due to the over 50% increase in the average fuel cost.
The average Fuel Cost Charge rate billed to consumers for Q2 2022
was $0.20 per kWh, compared to the
average Fuel Cost Charge rate of $0.13 per kWh for Q2 2021. CUC passes
through all fuel costs to consumers on a two-month lag basis with
no mark-up.
President and CEO, Mr. Richard
Hew, stated, "We are excited that the process to procure
cleaner and lower priced renewable energy in large scale has begun
as the significant increases in diesel fuel prices has been and
will continue to affect our customers' bills. The Company has been
proactive in its messaging to encourage customers to take the
necessary steps to conserve energy and is collaborating with the
OfReg and the Cayman Islands Government to find ways to mitigate
the cost impact in the short term, particularly during the high
consumption summer months."
CUC's Second Quarter 2022 results and related Management's
Discussion and Analysis ("MD&A") for the period ended
June 30, 2022 are attached to this
release and incorporated by reference.
The MD&A section of this report contains a discussion of
CUC's unaudited 2022 Second Quarter results, the Cayman Islands economy, liquidity and capital
resources, capital expenditures and the business risks facing the
Company. The release and Second 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.