Caribbean Utilities Company, Ltd. (CUC) Announces Unaudited First Quarter Results
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, May 3, 2023 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC or "the Company") announced its unaudited results for the first three months of 2023, ending March 31, 2023 (all figures are in United States Dollars).
CUC continues to implement its Capital Investment Plan (2023-2027) which was approved by the Utility Regulation and Competition Office ("OfReg") in January 2023. Grand Cayman has continued to benefit from the capital investments that have been made and will continue to be made over the next 5 years.
In 2022, the Company submitted its Capital Investment Plan ("CIP") for 2023-2027 to OfReg for approval. The plan included an investment amount of $403.4 million and will include a $60 million investment in alternative energy and resiliency projects. Both the Company and OfReg announced the initiation of two independent studies, which would be followed by an update to the public regarding the plans for upcoming distributed renewable energy solar generation programmes in early 2023. The Company's study was undertaken to analyse the impact of additional renewable energy on fuel efficiency of the current existing generating units of CUC. Based on findings, an additional 3 megawatts ("MW") capacity was released and allocated to the Consumer Owned Renewable Energy ("CORE") and Distributed Energy Resources ("DER") Programmes. The study indicated additional renewable energy was within appropriate limitations and this will cause no significant impact to fuel efficiency.
The Company also received regulatory approval for lifecycle upgrades to 5 MAN generating units totaling 68MW of capacity. This upgrade will substantially prepare the engines to be converted to run on liquid natural gas or diesel while also improving their fuel efficiency. This project supports the Cayman Islands National Energy Policy (NEP) by embracing energy efficiency, reducing emissions and diversifying the generation portfolio with the capability to generate energy from gas or diesel from the Engine Room 5 (ER5). This project is slated to begin in 2023.
Net earnings for the three months ended March 31, 2023 ("First Quarter 2023" or "Q1 2023") were $5.2 million, a $0.3 million decrease from net earnings of $5.5 million for the three months ended March 31, 2022 ("Q1 2022"). This decrease is primarily attributable to higher finance charges, depreciation and general and administration costs that were partially offset by higher other income. Electricity sales revenues increased by $2.5 million for Q1 2023. In 2023, electricity sales revenues for Q1 totaled $24.6 million, Q1 2022 sales totaled $22.1 million. This increase is primarily driven by 6% kWh sales growth. This growth can be attributed to the 3% customer growth and recovery in hotels and restaurants as tourism rebounded.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A shares for Q1 2023 were $5.1 million, or $0.14 per Class A ordinary share, as compared to $5.4 million, or $0.14 Class A ordinary share for Q1 2022.
President and CEO, Mr. Richard Hew, stated, "The continued growth and recovery of tourism in the Cayman Islands contributed positively to the Company's Q1 results. Consumption of electricity by large commercial entities and the overall economic growth on Grand Cayman were big contributors to the success of the Company in the first quarter. Our Company is moving ahead with the plans for increased alternative energy and resiliency projects."
With increased capacity approved for the CORE and DER programmes, there is now a total of 18 MW of capacity for customer interconnection, this capacity is complemented by the 5 MW solar farm in Bodden Town. It is expected that additional renewable energy allocation will occur prior to the commercial operation date of the 20 MW Battery Energy Storage System ("BESS"). The CORE and DER programmes take into consideration the long-term goals of the National Energy Policy and the Integrated Resource Plan.
CUC's First Quarter 2023 results and related Management's Discussion and Analysis ("MD&A") for the three months period ended March 31, 2023 are incorporated by reference. The MD&A section of this report contains a discussion of CUC's unaudited 2023 First Quarter results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and First Quarter 2023 MD&A can be accessed at www.cuc-cayman.com (Investor Relations/Press Releases) and at www.sedar.com.
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.
https://mma.prnewswire.com/media/2069370/Caribbean_Utilities_Company_Ltd_Q1_2023_Interim_Report.pdf
SOURCE Caribbean Utilities Company, Ltd.
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