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. 30 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC" or "the Company") announced today its unaudited results for the first quarter ended July 31, 2007 (all figures in United States dollars).
"We experienced strong growth in demand for electricity in the first quarter of fiscal 2008 as the Cayman Islands economy expanded and the commercial and residential construction continued at a healthy pace," remarked Richard Hew, CUC President and Chief Executive Officer.
Net earnings for the three months ended July 31, 2007 declined slightly to $7.8 million from $8.1 million for the same period last year. Earnings on Class A Ordinary Shares for the quarter were $7.2 million, or $0.2859 per Class A Ordinary Share, compared to $7.7 million, or $0.3034 per Class A Ordinary Share, for first quarter fiscal 2007. The 3% decline in net earnings was due to increased depreciation, interest and maintenance expenses partially offset by 8% kiloWatt-hour ("kWh") sales growth. First quarter 2007 saw delays in the Company's scheduled maintenance program, which resulted in lower than usual expenses for that period. The $0.5 million quarter-over quarter increase in maintenance expenses is reflective of a return to normal maintenance schedules.
Operating revenues for the first quarter were $43.4 million, a 5% increase over $41.3 million for the same period last year. This $2.1 million increase was driven by strong kWh sales growth and an 8% increase in Cost Recovery Surcharge revenues. Fuel factor revenues for the period were comparable to last year. Total electricity sales for the quarter increased 8% to 141.8 million kWh from 131 million kWh for the same period last year. Residential electricity sales increased 8% and commercial electricity sales increased 9% compared to first quarter fiscal 2007. Total customers as at July 31, 2007 were 23,087, an increase of 7% over last year. Total operating expenses increased 7% to $33.7 million and were primarily driven by higher production levels and maintenance expenses.
"Demand peaked in July at 91.7 MW, a 9% increase over the same period last year, but was reliably met by our 136.6 MW of installed generating capacity," said Mr. Hew. "Our new 16 megaWatt MAN Diesel generating unit completed commissioning procedures in June and was accepted by CUC on time and on budget. The new generating unit is a welcomed addition to bolster capacity with improved fuel efficiency and emissions performance. Our customers experienced an Average System Availability Index ("ASAI") for the quarter of 99.94%, ahead of our target of 99.93%, as the increased generating capacity and transmission and distribution maintenance activities had a positive effect on the number of customer outages."
Licence negotiations with the Cayman Islands Government ("Government") continue, and CUC met with Cabinet in May 2007 and submitted a new proposal to Government at its request in mid-June. The Company has since been actively engaged in discussions with Government based on the new proposal. The current Licence remains in full force and effect until January 2011 or until replaced by a new Licence by mutual consent.
CUC also announced today that it has entered a five-year primary diesel fuel supply contract with ESSO Standard Oil S.A. ("Esso") following completion of a competitive tender process. Esso, as CUC's primary supplier, shall provide approximately 80% of the fuel required to operate the Company's North Sound Plant.
CUC has also entered five-year supply contracts with Texaco Caribbean Inc. ("Texaco") and Cayman PetroServices Ltd. ("Cayman Petro") following completion of a competitive tender process. Texaco will provide the Company with a secondary supply of diesel fuel, while Cayman Petro will supply 100% of the lubricating oil required to operate the North Sound Plant.
CUC's First Quarter Report for the period ended July 31, 2007 is attached to this release and incorporated by reference and can be accessed by clicking the link below:
http://files.newswire.ca/520/CUC_qrjuly07.pdf
The Management's Discussion and Analysis section of this report contains a detailed discussion of CUC's unaudited first quarter financial results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and First Quarter Report can be accessed at www.cuc-cayman.com (Investor Relations/Press Releases) and at www.sedar.com.
CUC is the sole provider of electricity to Grand Cayman, Cayman Islands and operates under a 25-year exclusive Licence with the Government of the Cayman Islands, which expires in January 2011. Further information is available at www.cuc-cayman.com.
Caribbean Utilities Company, Ltd. ("CUC" or "the Company"), on occasion, includes forward-looking statements in its media releases, Canadian securities regulatory authorities filings, shareholder reports and other communications. Forward-looking statements are based on underlying assumptions by their very nature and are subject to certain risks and uncertainties that may cause actual results to vary from plans, targets and estimates. Such risks and uncertainties include but are not limited to general economic, market and business conditions, regulatory developments and weather conditions. CUC cautions readers that actual results may vary significantly from those expected should certain risks or uncertainties materialize or should underlying assumptions prove incorrect. 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.
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