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. 6 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC" or the "Company") announced today its unaudited results for the second quarter ended June 30, 2009 (all figures in United States dollars).
In August of 2008, the Company announced it would change its year end to December 31. Therefore, as a result of this change, the analysis for the six months ended June 30, 2009 includes comparisons to the six month period ended July 31st 2008. The six month period ended July 31, 2008 is the sum of the previously reported three month period ended April 30, 2008 and the three month period ended July 31, 2008. This is the period closest to that of the six months ended June 30, 2009.
Electricity sales for the second quarter of 2009 totaled 142.2 million kilowatt hours ("kWh") in comparison to 149.1 million kWh for the three months ended July 31, 2008; a decrease of 5%. For the first half of 2009, electricity sales declined by 6% to 262.3 kWh, compared to 277.8 kWh for the six months ended July 31, 2008. Electricity sales were adversely affected by lower than average temperatures throughout the first half of 2009. Also affecting the sales variance is the comparison of two differing periods as described above.
Net earnings for the second quarter of 2009 were $5.0 million. This represents a 6% or $0.3 million decrease from net earnings of $5.3 million for the three months ended July 31, 2008. Net earnings for the first half of 2009 were down $2.2 million or 23% at $7.5 million compared to net earnings of $9.7 million for the six months ended July 31, 2008. Varying temperatures, negative sales growth for the period as compared to the three months ended July 31, 2008 and increased depreciation expense have contributed to this decline. Comparison of earnings in the first half of 2009 to the six months ended July 31, 2008 includes, due to timing, the favourable fuel cost recovery of $2.5 million for the three months ended April 30, 2008. 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.
President and CEO of CUC Mr. Richard Hew said, "At the end of the second quarter of 2009, CUC remains a strong and stable company despite the economic downturn and consequent budget and other resource constraints."
After the adjustment for dividends on the Class B Preference Shares of the Company, earnings on Class A Ordinary Shares for the second quarter of 2009 were $4.9 million, or $0.18 per Class A Ordinary Share, as compared to $4.7 million, or $0.19 per Class A Ordinary Share for the three months ended July 31, 2008. Earnings on Class A Ordinary Shares for the first half of 2009 were $7.3 million, or $0.26 per Class A Ordinary Share, as compared to $9.0 million, or $0.36 per Class A Ordinary Share for the six months ended July 31, 2008.
During the second quarter of 2009, the Company closed the first tranche of a private placement of 7.50% Senior Unsecured Notes in the amount of $30 million. The second tranche of $10 million closed in early July. Mr. Hew stated that, "The availability of this capital to repay short-term indebtedness and to finance ongoing additions and upgrades to our systems, demonstrates the continued financial strength of the Company."
The Company connected 222 customers during the second quarter of 2009. Of these, 171 customers were added to the residential category and 51 customers were added to the commercial category. Total customers as at June 30, 2009 were 25,068, an increase of 4% over the 24,167 customers as at July 31, 2008.
Customer growth contributed to a new system peak load of 94.4 Megawatts ("MW") in June 2009, up 2% from the peak load of 92.9 MW recorded in June 2008. A further new system peak load was recorded after the end of the period at 95.9 MW on July 21, 2009. Currently CUC has an installed generation capacity of 136 MW with an additional 16 MW to be in service in September this year.
"We will continue to monitor the global and local economies and to build flexibility into our financial plans to enable us to respond to any changes in the business environment. In view of the current economic downturn, CUC continues to take the necessary steps to ensure that our business remains efficient and effective", Mr. Hew said.
CUC's Second Quarter Report for the period ended June 30, 2009 is attached to this release, is incorporated by reference and can be accessed by clicking the link below:
http://files.newswire.ca/520/CUCQ22009_Final.pdf
The Management's Discussion and Analysis section of this report contains a detailed discussion of CUC's unaudited second quarter financial results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and Second 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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