The 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, Oct. 27, 2023 /CNW/ - The Caribbean
Utilities Company, Ltd. ("CUC or "the Company") announced its
unaudited results for the three- and nine-months ending
September 30, 2023 (all figures are in
United States Dollars).
Highlights
- Net earnings for the three months ended September 30, 2023 ("Third Quarter 2023" or "Q3
2023") were $13.9 million, a
$3.5 million or 34% increase compared
to the three months ended September 30,
2022 ("Third Quarter 2022" or "Q3 2022").
- 10% increase in kilowatt-hour ("kWh") sales in Q3 2023 compared
to Q3 2022 driven by the 2% customer growth and increase in average
customer consumption.
- New record peak load of 124 megawatts (MW) experienced in
July 2023 with no disruption to
service.
- Average monthly temperature for Q3 2023 hit a historic high of
87.2F compared to 85.4F in Q2 2022.
- Continued progress on the installation of battery energy
storage systems expected to be commissioned during the first half
of 2024.
- Request for qualifications sought for the supply of natural gas
as an alternative fuel to generate firm capacity while the Company
continues its focus on utility-scale renewable energy
projects.
- Release of 2023 Sustainability Update Report – focus on the
Company's progress on environmental, social and governance
initiatives.
- Renewal of annual property insurance with no reported claims in
the past 10 years.
- Collaborated with the Ministry of Sustainability and Climate
Resiliency on a home energy efficiency programme (CHEER) for
vulnerable persons on Grand
Cayman.
"A growing economy and record high temperatures drove a
significant increase in consumer demand for electricity; the
Company continues to meet this demand safely and reliably. We
continue progress with major projects such as the battery energy
storage system and natural gas conversion which will lower our
carbon emissions and stabilize energy costs for our customers. We
look forward to participating in any utility scale renewable energy
bid conducted by the Utility Regulation and Competition Office
("OFREG")" which we believe will bring energy cost reductions for
consumers," said Mr. Richard Hew,
President and Chief Executive Officer.
Net Earnings and Sales
Revenues
Net earnings for the Third Quarter 2023 were $13.9 million, a $3.5
million increase from $10.4
million for Third Quarter 2022. This increase is primarily
attributable to increase in kWh sales partially offset by higher
finance charges. After the adjustment for dividends on the
preference shares of the Company, earnings on Class A Ordinary
Shares for Q3 2023 were $13.8
million, or $0.36 per share,
as compared to $10.3 million, or
$0.28 per share for Q3
2022.
Sales in kWh for Q3 2023 were 203.2 million kWh which is an
increase of 19.2 million kWh or 10% compared to Q3 2022. The
increase in kWh sales is driven by a 2% growth in the overall
customer numbers and the increase in the average consumption of
residential customers. Total customers as of September 30, 2023, were 33,503, an increase of
638 customers.
Electricity sales revenues increased by $4.2 million for Q3 2023 to $32.1 million when compared to Q3 2022. The
increase in electricity sales is primarily driven by both the
increase in kWh sales and the base rate increases of 5.4% and 3.7%
effective June 1, 2022 (deferred to
January 1, 2023) and June 1, 2023, respectively.
Fuel factor and renewable revenues are a pass-through at cost to
customers. Fuel factor decreased by $9.8
million or 20% for Q3 2023 compared to Q3 2022. This is
driven by the decrease in the average Fuel Cost Charge Rate,
partially offset by the increase in kWh sales. The average rate
charged to consumers for Q3 2023 was $0.21 per kWh, compared to $0.29 per kWh for Q2 2022. The Company's
average price per imperial gallon of fuel for Third Quarter 2023
decreased by 28% to $3.80 in
comparison to $5.27 for Third Quarter
2022. The fuel cost constitutes about 54% of the customer bill for
Q3 2023.
Key Updates
The Company renewed its annual property insurance on
July 1, 2023, despite the
Caribbean region facing
significant insurance premium hikes during the past year. No
insurance claims have been made by the Company during the preceding
10 years. The Company continues its efforts to improve the
resiliency of its infrastructure to mitigate any increased risk of
property damage due to climate change. The Company was able to
renew its insurance with no change in coverage from prior years and
on favourable rate terms.
The Company continues its effort to reduce the cost of energy
production and carbon emissions. As a part of the Company's
Integrated Resource Plan and the Cayman Islands National Energy
Policy, the Company sought qualification submissions from
prospective natural gas suppliers as an alternative fuel to
generate firm capacity. Continual progress is being made on the
life cycle upgrade project for the dual-fuel conversion of five of
its generating units, totaling 68 MW of capacity. This project aims
to meet base load and capacity needs while the Company continues to
pursue utility scale renewable energy projects.
In collaboration with local organization, Resilience Cayman, the
Company assisted with the execution of the Ministry of
Sustainability and Climate Resiliency to deliver the Cayman Home
Energy Efficiency Retrofit (CHEER) programme. This programme
provides energy-saving retrofits for lower-income households. CUC
has provided home energy monitors and has conducted comprehensive
energy audits on behalf of these households.
Capital
Expenditures
Capital expenditures for the nine months ending September 30, 2023, were $78.3 million, an increase of $12.5 million, or 13% compared to $65.8 million for the nine months ending
September 30, 2022. These
expenditures primarily relate to several projects highlighted
below:
- Distribution system extension and upgrades,
- Generation replacements,
- Engine room 5 conversion to natural gas,
- Alternate energy technologies,
- Installation of utility scale battery storage (ongoing),
- Facility and auxiliary asset replacement costs, and other
- Resiliency projects
CUC's Third Quarter 2023 results and related Management's
Discussion and Analysis ("MD&A") are attached to this release
and incorporated by reference. The MD&A section of this
report contains a discussion of CUC's unaudited Third Quarter
results, the Cayman Islands
economy, liquidity and capital resources, capital expenditures and
the business risks facing the Company. The release and Third
Quarter 2023 MD&A can be accessed at
www.cuc-cayman.com (Investor Relations/Press Releases) and at
www.sedarplus.ca.
The principal activity of the Company is to generate, transmit
and distribute electricity in its licence area of Grand Cayman, Cayman
Islands pursuant to a 20-year Transmission &
Distribution ("T&D") Licence and a 25-year non-exclusive
Generation Licence (the "Generation Licence" and together with the
T&D licence, the "Licences") granted by the Cayman Islands
Government (the "Government", "CIG"). The T&D Licence, which
expires in April 2028, contains
provisions for an automatic 20-year renewal and the Company has
reasonable expectation of renewal until April 2048. The Generation Licence expires in
November 2039. 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.