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, July 28, 2022 /CNW/ – Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the three and six months ended June 30, 2022 (all dollar amounts are stated in United States dollars).
Caribbean Utilities Company, Ltd. (CUC) will participate in the upcoming solicitation for utility-scale renewable energy to be conducted by the regulator. This is part of the Company's activities under the Integrated Resource Plan that will transform the energy sector in Grand Cayman and 'green' CUC's grid.
In April 2022, The Utility Regulation and Competition Office ("OfReg") issued a Request for Qualification ("RFQ") for the Renewable Energy Auction Scheme ("REAS") Competition Round 1. The REAS Round 1 is intended to select a party, or parties, to operate and maintain Solar Photovoltaic Plants and Energy Storage up to 100MW with 60MW Battery Energy Storage System Facility. OfReg also issued an RFQ for a solar plus storage 23MW Dispatchable Photovoltaic Generation plant facility.
The Company has received approval from OfReg for a 20 MW battery which will assist the diesel generators with grid stability during loss of generation and also reduce fuel consumption. This project is under way and it is anticipated to come online in late 2023.
In May 2022, Standard & Poors ("S&P") revised its rating of the Company to stable from negative BBB+ due to consistent financial performance. Despite the pandemic, which negatively affected Cayman's tourism industry, CUC's financial measures have consistently remained above S&P's downgrade threshold.
The financial results for the Company for the three months ending June 30, 2022 ("Second Quarter 2022" or "Q2 2022") reflect the ongoing economic recovery following the COVID -19 pandemic. During this period the Company recorded an increase in sales as well as an increase in its customer base.
Net earnings for Q2 2022 totalled $8.3 million, a decrease of $0.3 million compared to $8.6 million for Q2 2021. Net earnings for the quarter were negatively impacted by an increase in general and administration expenses, customer services cost and depreciation. These factors were partially offset by an increase in electricity sales revenues. After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Q2 2022 totalled $8.2 million, or $0.22 per Class A Ordinary Share, compared to earnings of $8.4 million, or $0.23 per Class A Ordinary Share in Q2 2021.
Net earnings for the six months ended June 30, 2022 totalled $13.8 million, an increase of $1.9 million or 16% when compared to net earnings of $11.9 million for the six months ended June 30, 2021. After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the six months ended June 30, 2022 were $13.6 million, or $0.36 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $11.7 million, or $0.32 per Class A Ordinary Share, for the six months ended June 30, 2021.
Sales for Q2 2022 totalled 171.3 million kWh, an increase of 0.5 million kWh in comparison to 170.8 million kWh for Q2 2021.
Sales for the six months ended June 30, 2022 ("Second Quarter 2022" or "Q2 2022") totalled 320.7 million kWh, an increase of 6.1 million kWh in comparison to 314.6 million kWh for the six months ended June 30, 2021 ("Second Quarter 2021" or "Q2 2021"). The increase in sales for Q2 2022 is primarily due to a 2% increase in kWh consumption across all customer categories and a 3% growth in overall customer numbers for Q2 2022 compared to Q2 2021.
There was an increase in the total customers as at June 30, 2022. The number of customers at the end of the Second Quarter 2022 was 32,553, an increase of 834 customers, or 3%, compared to 31,719 customers as at June 30, 2021.
Volatile fuel prices continue to present a challenge for the Company and its customers.
Fuel factor revenues for Q2 2022 totalled $30.9 million, an increase of $9.5 million, compared to fuel factor revenues of $21.4 million for Q2 2021. This is primarily due to the over 50% increase in the average fuel cost. The average Fuel Cost Charge rate billed to consumers for Q2 2022 was $0.20 per kWh, compared to the average Fuel Cost Charge rate of $0.13 per kWh for Q2 2021. CUC passes through all fuel costs to consumers on a two-month lag basis with no mark-up.
President and CEO, Mr. Richard Hew, stated, "We are excited that the process to procure cleaner and lower priced renewable energy in large scale has begun as the significant increases in diesel fuel prices has been and will continue to affect our customers' bills. The Company has been proactive in its messaging to encourage customers to take the necessary steps to conserve energy and is collaborating with the OfReg and the Cayman Islands Government to find ways to mitigate the cost impact in the short term, particularly during the high consumption summer months."
CUC's Second Quarter 2022 results and related Management's Discussion and Analysis ("MD&A") for the period ended June 30, 2022 are attached to this release and incorporated by reference.
The MD&A section of this report contains a discussion of CUC's unaudited 2022 Second Quarter results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and Second Quarter 2022 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 2039 and an exclusive Electricity Transmission and Distribution Licence expiring in 2028. Further information is available at www.cuc-cayman.com.
Certain statements in the MD&A, other than statements of historical fact, are forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to the Company and its operations, including its strategy and financial performance and condition.
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 operational, 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.
SOURCE Caribbean Utilities Company, Ltd.