Caribbean Utilities Company, Ltd Announces Third Quarter Results for the Period Ended September 30, 2019
Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange.
Caribbean Utilities Company, Ltd. (TSX:CUP-U.TO) ("CUC" or "the Company") announced today its unaudited results for the three months ended September 30, 2019 ("Third Quarter" or "Q3 2019) (all figures in United States dollars).
President and CEO, Mr. Richard Hew, says, "Third Quarter 2019 continued a trend of positive quarterly financial results for the Company. The record level of electricity demanded by our customers is being met in a safe and efficient manner by the continuous reinvestment in modern equipment and development of our people. Year to date the Company has invested $43.7 million in the physical infrastructure required to meet present and future customer service requirements. Major projects such as the new Seven Mile Beach and Prospect substations, the control room and control system ("SCADA") are progressing as planned and we look forward to commencing the recently approved battery storage project and connecting more renewable energy to the grid as outlined by the Integrated Resource Plan. The Company expects that the initial savings to the customers from the battery storage project will be approximately $1 million per annum."
The Company anticipates investing over $270 million towards system extension and upgrades during the next five years, in-line with the recently approved 2019-2023 Capital Investment Plan.
CUC's operating income for Q3 2019 totalled $9.7 million, an increase of $0.3 million when compared to operating income of $9.4 million for the three months ended September 30, 2018 ("Third Quarter 2018" or "Q3 2018"). The increase is primarily attributable to higher electricity sales revenues which was partially offset by higher depreciation and maintenance expenses.
Net earnings for Q3 2019 totalled $10.4 million, an increase of $1.2 million from $9.2 million in Q3 2018. In addition to the items impacting operating income, net earnings were also positively impacted by higher other income and lower finance charges driven by higher Allowance for Funds Used During Construction ("AFUDC"). Other income was positively impacted by a one-off write back of previously recognized bad debt expenses of $1.1 million by the subsidiary company DataLink. These items were partially offset by higher interest on long-term debt and lower foreign exchange gains.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Q3 2019 were $10.3 million, or $0.31 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $9.1 million, or $0.27 per Class A Ordinary Share for Q3 2018.
Sales for the three months ended September 30, 2019 totalled 184.4 million kilowatt hours ("kWh"), an increase of 13.6 million kWh, or 8% increase in comparison to 170.8 million kWh for the three months ended September 30, 2018. This was driven by an increase in the average customer consumption in Q3 2019 compared to Q3 2018. The average monthly temperature for Q3 2019 was 86.5 degrees Fahrenheit as compared to an average monthly temperature of 85.4 degrees for Q3 2018. Warmer temperatures increase air conditioning load which can positively impact the Company's sales.
During Q3 2019, there was an increase in the number of customers connected to the CUC grid. Total customers as at September 30, 2019 were 30,254, an increase of 670 customers, or 2%, compared to 29,584 customers as at September 30, 2018.
On August 28, 2019, the Company experienced a new system peak demand of 113.5 megawatts ("MW"). Prior years' peak demand was 105.6 MW (2017) and 103.6 MW (2018). The Company's installed generating capacity is 161 MW and other renewable capacity connected to the grid increased to 10.3 MW in September 2019 from 9.7 MW in September 2018.
CUC's Third Quarter results and related Management's Discussion and Analysis ("MD&A") for the period ended September 30, 2019 are attached to this release and incorporated by reference.
The MD&A section of this report contains a discussion of CUC's unaudited 2019 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 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", "plans", "believes", "estimates", "intends", "targets", "projects", "forecasts", "schedules", 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.
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SOURCE: Caribbean Utilities Company, Ltd.
Letitia Lawrence, Vice President Finance and Chief Financial Officer, Phone: (345) 914-1124, E-Mail: firstname.lastname@example.org