The 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, Aug. 2, 2023 /CNW/ - Caribbean Utilities
Company, Ltd. ("CUC or "the Company") announced its unaudited
results for the three- and six months ended June 30, 2023 (all figures are stated in
United States Dollars).
Highlights
- Net earnings for the three months ended June 30, 2023 ("Second Quarter 2023" or "Q2
2023") were $10.0 million, a
$1.7 million increase compared to
three months ended June 30, 2022
("Second Quarter 2022" or "Q2 2022").
- 3% increase in the regular quarterly dividend from $0.175 to $0.18 per
class ordinary share.
- 2% increase in customers when compared to Second Quarter
2022.
- 8% kilowatt-hours ("kWh") increase in electricity sales
compared to Second Quarter 2022.
- Credit rating agency, Moody's released the Cayman Islands AAA
country ceiling rating and has referenced that the Cayman Islands' political environment, strong
policy continuity and sound financial management allows for a
stable economic outlook.
- Continual progress on the installation of Battery Energy
Storage Systems with potential completion in Q2 2024.
- Continual progress with the conversion of the 5 MAN generating
units to natural gas.
- 6 megawatts ("MW") of capacity approved by the Utility
Regulation and Competition Office ("OfReg") for Customer Owned
Renewable Energy Programmes.
"Q2 2023 sales were strong, supported by a growing economy and
hotter than normal temperatures. We are pleased to release another
6 megawatts of renewable capacity for customers to participate in
the carbon reduction efforts. We look forward to the long-awaited
utility scale renewable energy bid to be conducted by OfReg, and to
advancing our natural gas procurement project. Both initiatives
will significantly reduce carbon emissions as well as reduce and
stabilize energy costs for our customers," said Mr. Richard Hew, President and Chief Executive
Officer of CUC.
Net Earnings and Sales Revenues
Net earnings for Second Quarter 2023, were $10.0 million, a $1.7
million increase from net earnings of $8.3 million for Second Quarter 2022. This
increase is primarily attributable to higher operating income
partially offset by higher finance charges. For the six months
ended June 30, 2023, net earnings
were $15.2 million which is a
$1.4 million increase from net
earnings of $13.8 million for the six
months ended June 30, 2022.
Sales in kWh for Q2 2023 were 185.2 million kWh which is an
increase of 13.9 million kWh or 8% compared to Q2 2022. Sales in
kWh for the six months ended June 30,
2023, totaled 344.1 million, an increase of 23.4 million or
7% when compared to 320.7 million for the six months ended
June 30, 2022. The increase in sales
for kWh is driven by a 2% growth in the overall customer numbers
and the increase in the average consumption of residential and
general commercial customers. Total customers as at June 30, 2023, were 33,356 which is an increase
of 803 customers or 2% when compared to June
30, 2022.
Electricity sales revenues increased by $3.2 million for Q2 2023 to $28.7 million when compared to electricity sales
revenues of $25.5 million for Q2
2022. Electricity sales revenues for the six months ended
June 30, 2023 were $53.4 million compared to $47.6 million for the six months ended
June 30, 2022. The increase in
electricity sales is primarily driven by 8% kWh sales growth and
the base rate increase of 5.4% and 3.7% effective June 1, 2022 and June 1,
2023, respectively.
Fuel factor and renewable revenues are pass-through costs to
customers. The fuel cost constitutes about 58% of the customer bill
for Q2 2023 and there has been a downward trend in fuel cost for
2023. The Company's average price per imperial gallon of fuel for
the three months ended June 30, 2023,
decreased by 22% to $3.71 in
comparison to $4.77 for the three
months ended June 30, 2022.
Key Updates
Average monthly temperatures continue to have an impact on
consumption in Grand Cayman. As at
June 30, 2023, the average monthly
temperature for Q2 2023 was 84.5 degrees Fahrenheit (F) compared to
83.1F in Q2 2022.
The Cayman Islands Consumer Price Index released by the Cayman
Islands Economics and Statistics Office for the First Quarter of
2023 was 130.6, which is 6.6% higher in comparison with the
corresponding quarter in 2022. In June
2023, the credit rating agency, Moody's affirmed the Cayman
Islands AAA country ceiling rating and has referenced that the
Cayman Islands political
environment, strong policy continuity and sound financial
management allows for a stable economic outlook.
In May 2023, the Board of
Directors approved a 3% increase in the regular quarterly dividend
from $0.175 to $0.18 per class ordinary share. The Class A
ordinary share (CUP.U) traded on the Toronto Stock Exchange at a
high of US$14.27 per share during Q2
2023.
The Company released another 6 MW of capacity for the Customer
Owned Renewable Energy and Distributed Energy Resources programmes
after approval from the Regulator. With this additional capacity,
there will be 29MW dedicated to renewable energy on the grid.
Capital Expenditures
Capital expenditures for the six months ended June 30, 2023, were $48.5
million, an increase of $10.9
million, or 29% in comparison to the $37.6 million for the six months ended
June 30, 2022. These expenditures
were primarily related to several projects which are highlighted
below:
- Generation replacements,
- Diesel generation conversion to natural gas,
- Alternate energy technologies,
- Installation of utility scale battery storage
- Facility and auxiliary asset replacement costs and other
- Resiliency projects
CUC's Second Quarter 2023 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 results, the Cayman Islands economy, liquidity and capital
resources, capital expenditures and the business risks facing the
Company. The release and Second Quarter 2023 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 Licence" 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.