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. 27 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC" or "the Company") announced today its unaudited results for the first quarter ended July 31, 2008 (all figures in United States dollars).
"First quarter 2009 earnings declined significantly over the same quarter last year due to the reduction in consumer rates given as part of the negotiations for new licences" remarked Richard Hew, CUC President and Chief Executive Officer.
Net earnings for the three months ended July 31, 2008 were $5.3 million compared to $7.8 million for the same period last year. Earnings on Class A Ordinary Shares for the quarter were $4.7 million, or $0.19 per Class A Ordinary Share, compared to $7.2 million, or $0.29 per Class A Ordinary Share, for first quarter fiscal 2008. The 32% decline in net earnings was principally due to the January 2008 removal of the Hurricane Ivan Cost Recovery Surcharge ("CRS") to customers as agreed with the Cayman Islands Government in December 2007. The CRS had been scheduled to be fully recovered in August 2008. The 3.25% rate reduction, implemented in January of 2008, and increased depreciation and maintenance expenses of $0.4 million each, were also contributing factors. General and administrative expenses were down $0.5 million over the same quarter in fiscal 2008. Total operating expenses increased 41% to $47 million, driven by increased fuel costs.
Total electricity sales for the quarter increased 5% to 149.1 million kiloWatt hour ("kWh") from 141.8 million kWh for the same period last year. Total customers as at July 31, 2008 were 24,167, an increase of 5% over last year.
"System demand peaked in June at 92.9 megaWatts ("MW"), and was reliably met by our 136.6 MW of installed generating capacity," said Mr. Hew. "In September of 2009, we will add an additional 16 MW of capacity to meet the continued growth on the island."
During the quarter, the Company provided recommendations to the Electricity Regulatory Authority ("ERA") regarding Customer Owned Renewable Energy purchase rates and renewable energy policy and submitted its Capital Investment Plan which forecasts additional investments of $255.0 million over the next five years including $80.0 million of generation investment which will be subject to competitive bid and will only be expended by CUC if it is the successful bidder.
The Company also announced that it will change its year end from April 30 to December 31, with the first full fiscal period under that change being the calendar year ending December 31, 2009. In 2008, the Company will report interim results for the six months ending October 31, 2008 based on the April 30 fiscal year end with the transitional eight month period being May 1, 2008 to December 31, 2008. The change in year end will align CUC's financial reporting periods with industry peers to better allow interested parties to compare financial results with those of other companies in the same industry.
The Company affirmed its earlier announcement that it is seeking expressions of interest from qualified developers to construct up to 10 MW of wind generation. Mr. Hew stated, "The recent escalation in fuel costs means that wind generation may now be economically viable. With the recent execution of our new licences, we now have a basis on which to pursue both non-firm alternate energy options such as wind and solar as well as continue our quest for firm alternate energy options that may have a meaningful impact on consumer rates."
CUC's First Quarter Report for the period ended July 31, 2008 is attached to this release and incorporated by reference and can be accessed by clicking the link below:
http://files.newswire.ca/520/CUC_Q1_2009.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 provides electricity to Grand Cayman, Cayman Islands, under an Electricity Generation Licence expiring in 2029 and an exclusive Electricity Transmission and Distribution Licence expiring in 2028. Further information is available at www.cuc-cayman.com.
CUC includes forward-looking statements in this material. 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 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.
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