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, March 2 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC" or "the Company") announced today its unaudited results for the third quarter ended January 31, 2007 (all figures in United States dollars).
"Primarily as a result of a one-time disposal of the Company's steam turbine and boilers ("steam system") assets, net losses for the three months ended January 31, 2007 were $0.6 million compared to net earnings of $3.9 million for the same period last year," said Richard Hew, CUC President and Chief Executive Officer. "Earnings per Class A Ordinary Share for the third quarter, excluding the $3.7 million net impact from the disposal of the steam system, would have been $0.12, and earnings per share for the nine months ended January 31, 2007 would have been $0.69, which was in line with the Company's projections. Third quarter 2007 results were also negatively impacted by $0.7 million of unplanned maintenance resulting from a series of unexpected generator failures. One of the failed generators has returned to service, with the remaining two expected to return by April 2007."
Losses on Class A Ordinary Shares for the third quarter, after the adjustment for preference dividends, were $0.7 million, or $0.03 per Class A Ordinary Share, compared to $3.8 million, or $0.15 earnings per share, for third quarter fiscal 2006.
The Company's decision to dispose of the steam system came after a detailed review by Management of the economics and the environmental impact of reinstating the system and continuing in the same mode of operation as prior to the hurricane, as well as various options of upgrading the system. "This is a one-time event as part of CUC's overall power plant restructuring, and the Company does not anticipate further expenses related to the steam system in the future," explained Mr. Hew. "Excluding the significant impact of this unusual occurrence in the third quarter, year-to-date earnings were in line with expectations, and the underlying fundamentals of the Company and its outlook remain positive."
Sales growth continued at a healthy rate with third quarter electricity sales of 121.8 million kiloWatt-hours, an 11% increase over the same quarter last year. This growth was largely driven by a 9% increase in customers connected, which totaled 22,492 at quarter-end. With a number of large commercial projects expected to be connected in the last quarter of fiscal 2007, Management is revising its projected 10% growth rate upward to the 10% to 12% range for fiscal 2007.
Cash flow from operations, after working capital adjustments, for the quarter was $7.9 million, an increase of $2.9 million over the same quarter last year. The Board of Directors declared in February a regular quarterly dividend of US$0.165 per Class A Ordinary Share, or an annualized dividend of US$0.66 per share, which will be payable March 15, 2007 to shareholders of record February 22, 2007.
"Our customers continued to benefit from falling fuel prices in the third quarter, with the fuel factor that appears on customers' bills decreasing from CI$0.109 per kWh in October 2006 to CI$0.089 per kWh in January 2007," remarked Mr. Hew. "With crude oil prices continuing their run below $60 per barrel through January, this lower level of fuel factor is expected to continue at least through March due to the two-month lag in the fuel factor process."
"CUC remains committed to providing value to our shareholders and to provide world-class, reliable service at least cost to our customers," stated Mr. Hew. "The Company has taken a strategic decision in the third quarter that has negatively impacted earnings in the short term but will provide long-term benefits to all stakeholders."
CUC's Third Quarter Report for the period ended January 31, 2007 is incorporated by reference to this release and can be accessed by clicking the link below:
http://files.newswire.ca/520/qrjan07[1].pdf
The Management's Discussion and Analysis section of this report contains a detailed discussion of CUC's unaudited third quarter financial results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and Third 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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