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, May 1 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC" or the "Company") announced today its unaudited results for the first quarter ended March 31, 2009 (all figures in United States dollars).
This is the first reporting period aligned with the calendar year following the announcement in August of 2008 that the Company would change its year end to December 31. Comparisons of the three months ended March 31, 2009 ("First Quarter 2009") results are to the three months ended April 30, 2008, the closest previously reported period in the prior year.
Net earnings for the First Quarter 2009 were $2.4 million, a $2.0 million, or 45% decrease from net earnings of $4.4 million for the three months ended April 30, 2008. Earnings results for the three months ended April 30, 2008 were impacted by a favourable fuel cost recovery of $2.5 million during that period. The introduction of a fuel tracker mechanism in the Company's 2008 Transmission and Distribution Licence has eliminated favourable or adverse timing differences in fuel cost recovery in the financial reporting quarters since April 2008. First Quarter 2009 earnings also reflect the difference in comparative periods with February through April traditionally having higher average temperatures than January through March.
Earnings per Class A Ordinary Share for the First Quarter 2009 were $2.3 million, or $0.08 per class A Ordinary share, as compared to $4.3 million, or $0.169 per Class A Ordinary Share, for the three months ended April 30, 2008.
Sales were affected by the cooler than average weather and increased conservation efforts on the part of consumers. KiloWatt hour sales for the First Quarter 2009 were 120.1 million when compared to 128.7 million for the three months ended April 30, 2008, a decline of 7%.
President and Chief Executive Officer, Mr. Richard Hew, stated, "New customer connections were 328 for the quarter bringing total customers to 24,846, a 3% increase since April 30, 2008. In anticipation that factors such as energy conservation and a declining global economy may have an impact on our revenues, management has developed flexible plans to ensure that CUC can respond to changing economic circumstances while continuing to deliver reliable service to our customers."
During the First Quarter 2009, the Company made capital expenditures of $9.2 million including $2.3 million on transmission and distribution system extension and upgrades and $2.8 million on generation system expansion. During the period, the Electricity Regulatory Authority ("ERA") also approved the Company's 2009 Capital Expenditure Program ("CIP") totaling $47.7 million and continued its review of the 2010 - 2013 CIP totaling $198 million.
CUC also announced it has submitted to the ERA its calculations indicating a base rate increase of 2.4% which, upon verification by the ERA would be effective June 1, 2009, as permitted by the Rate Cap and Adjustment Mechanism ("RCAM") set out in CUC's Electricity Transmission and Distribution Licence. This will be the first increase in base rates that the Company has implemented in seven years and follows a 3.25% rate reduction in January 2008 as part of the Licence negotiations with the Cayman Islands Government.
"For the past seven years the Company has absorbed the full impact of inflation in the price of goods and services it employs to generate and distribute electricity to customers. This is not sustainable and the marginal increase in base rates will ensure that the Company can continue to build and operate a system that delivers efficient and reliable service to its customers in Grand Cayman. CUC's base rates after the increase would remain below 2002 levels." stated Mr. Hew.
Since 2004, CUC has invested over $175 million in infrastructure to meet customer growth to ensure continued performance and reliability.
CUC's First Quarter 2009 results and related Management's Discussion and Analysis ("MD&A") for the First Quarter 2009 are attached to this release and incorporated by reference and can be accessed by clicking the link below:
http://files.newswire.ca/520/CUC_Q1_09.doc
The MD&A section of this report contains a discussion of CUC's unaudited First Quarter 2009 results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and First Quarter 2009 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 2029 and an exclusive Electricity Transmission and Distribution Licence expiring in 2028. 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 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 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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