Caribbean Utilities Company, Ltd. is listed for trading United States dollars on the Toronto Stock Exchange under the symbol “CUP.U”.
GRAND CAIMAN, CAYMAN ISLANDS, October 28, 2022 /CNW/ – Caribbean Utilities Company, Ltd. (TSX: CUP.U) (“CUC” or “the Company”) today announced its unaudited results for the three and nine months ended September 30, 2022 (all dollar amounts are shown in United States dollars).
The results of the Company for the three months ended September 30, 2022 (“Third Quarter 2022” or “Q3 2022”) show growth in the number of customers and energy sales, but with average consumption by residential customers falling in the face of high fuel prices. The company successfully facilitated a Cayman Islands government fuel cost relief program to assist residential customers. Depreciation expense increased during the quarter due to the commissioning of the Seven Mile Beach and Prospect substations and other growth-related capital projects. Reliability and safety results were as expected, and the company endured Tropical Storm Ian with minimal physical damage. Earnings increased slightly for the quarter compared to the same period last year.
A highlight of the third quarter of 2022 was the signing of an agreement with technology group Wärtsilä. Wärtsilä will supply two 10 megawatt/10 megawatt-hour energy storage systems to CUC. This project is primarily designed to reduce the inline or spinning reserve requirement currently provided by diesel engines and will improve fuel efficiency by approximately 6%, with a corresponding reduction in CO emissions.2 emissions. This is CUC’s first energy storage facility and will also allow the Company to increase the amount of intermittent renewable energy connected to the grid on Grand Cayman while improving grid stability, reliability and power quality.
During the third quarter of 2022, as part of the company’s ongoing restructuring program, CUC announced the promotion of four Caymanians to its management team. CUC also released its first Sustainability Report which discusses programs that demonstrate CUC’s commitment to high standards in environmental, social and governance initiatives.
Global fuel prices continued to rise in the third quarter, which impacted CUC’s fuel costs. Power generation expenses for Q3 2022 totaled $52.4 millioni.e. an increase of 70% compared to the electricity production expenses of $30.8 million for the three months ended September 30, 2021 (“Third Quarter 2021” or “Q3 2021”). This is primarily due to the 75% increase in the average fuel price per imperial gallon during Q3 2022 compared to Q3 2021). The average fuel cost charge rate charged to consumers for the third quarter of 2022 was $0.29 per kilowatt-hour (“kWh”), compared to the average fuel cost charge rate of $0.17 per kWh for the third quarter of 2021. The CUC passes all fuel costs and renewable costs on to consumers with a two-month lag without a mark-up. The Company continues to educate its customers on ways to manage their energy consumption.
Q3 2022 net profit totals $10.4 millionan augmentation of $0.3 million or 3% compared to $10.1 million Q3 2021. This is due to the increase in kWh sales of 2% and customer growth of 3%. Net income for the third quarter of 2022 was positively impacted by lower transportation and distribution costs and higher foreign exchange gains and negatively impacted by higher depreciation and amortization, general and administrative expenses and increase in financial charges.
After adjusting for dividends on the Company’s preferred shares, earnings on Class A common shares for the third quarter of 2022 totaled $10.3 millionWhere $0.28 per Class A common share, compared to earnings of $10.0 millionWhere $0.26 per Class A common share for the third quarter of 2021.
Net profit for the nine months ended September 30, 2022 totaled $24.2 millionan augmentation of $2.2 million or 10% compared to the net profit of $22.0 million for the nine months ended September 302021.
After adjusting for dividends on the Company’s preferred shares, earnings on Class A common stock for the nine months ended September 30, 2022 totaled $23.9 millionWhere $0.64 per Class A common stock, compared to earnings on Class A common stock of $21.7 millionWhere $0.58 per Class A common share, for the nine months ended September 30, 2021.
Sales for Q3 2022 totaled 184.0 million kWh, an increase of 4.1 million kWh or 2% from 179.9 million kWh for Q3 2021. The increase in sales was driven by the increase in commercial customer sales in Q3 2022 compared to Q3 2021 and the 3% increase in the number of customers between Q3 2022 and Q3 2021.
Sales in kWh for the nine months ended September 30, 2022 totaled 504.6 million kWh, an increase of 10.1 million kWh or 2% from 494.5 million kWh for the nine months ended September 30, 2021. The increase in sales is mainly due to a growth of 3% in the total number of customers for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The number of customers at the end of September 30, 2022 was 32,865, an increase of 901 customers, or 3%, compared to 31,964 customers in September 30, 2021.
During the third quarter of 2022, the Company recorded a new system peak load of 113.573 megawatts.
President and CEO, Mr. Richard Hewsaid: “The current state of global fuel markets underscores the need and our desire to advance activities under the Integrated Resource Plan as quickly as possible, particularly utility-scale solar projects, to transition to more sustainable energy solutions that bring price stability and reduce Tropical Storm Ian also reminds us of the importance of building resilient systems such as our indoor substations to adapt to more frequent storms brought about by climate change.”
CUC Third Quarter 2022 Results and Related MD&A for the Period Ended September 30, 2022 are incorporated by reference.
The MD&A section of this report contains an analysis of CUC’s third quarter 2022 unaudited results, Cayman Islands the economy, liquidity and capital resources, capital expenditures and business risks facing the Company. The third quarter 2022 press release and MD&A can be viewed at www.cuc-cayman.com (Investor Relations/Press Releases) and at www.sedar.com.
CUC provides electricity to Grand Cayman, Cayman Islandsunder a power generation license expiring in 2039 and an exclusive power transmission and distribution license expiring in 2028. Further information is available at www.cuc-cayman.com.
Certain statements contained in the MD&A, other than statements of historical fact, are forward-looking statements regarding anticipated future events, results, circumstances, performance or expectations regarding the Company and its operations, including its strategy and its financial performance and condition.
Forward-looking statements include statements that are predictive in nature, depend on future events or conditions, or include words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, ‘intends’, ‘target’, ‘projects’, ‘forecast’, ‘schedule’ or their negative versions 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 the beliefs, estimates and opinions of management, and are subject to inherent risks and uncertainties surrounding future expectations generally, which may cause actual results to differ 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 titled “Business Risks” and include, but are not limited to, operational, general economic, market and business conditions, regulatory developments and weather conditions. CUC cautions readers that actual results may differ materially from those expected if certain risks or uncertainties materialize, or if underlying assumptions prove incorrect. Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans regarding the future. Readers are cautioned that this information may not be suitable for other purposes. The Company disclaims any intention or obligation to update or revise any forward-looking statement, 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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