Caribbean Utilities Company, Ltd. announces its results for the twelve-month period ended December 31, 2020
Caribbean Utilities Company, Ltd. (TSX: CUP.U) (“CUC” or “the Company”) announced today its audited results for the twelve-month period ended December 31, 2020 (all figures in United States dollars).
Caribbean Utilities Company, Ltd., like many other companies in Grand Cayman and across the globe, was significantly impacted in 2020 by the COVID-19 pandemic. However, in spite of the challenges which the pandemic presented, the Company was able to achieve targets set in the areas of reliability and customer satisfaction, with a focus on ensuring the health and safety of our employees.
The Company completed the first phase of its Technology Center and Control Room and made good progress with the Seven Mile Beach and Prospect substations which are expected to be commissioned in early 2021. Efforts continued with the tendering process for the 20 megawatt utility-scale battery project which was approved by the Utility Regulation and Competition Office (“OfReg”) in 2019. Battery storage provides the grid stability necessary to integrate higher levels
of intermittent renewables.
For the year ended December 31, 2020 (“Fiscal 2020”), the Company’s Environmental Management System successfully passed the surveillance audit of the system, with no minor or major non-conformances identified. Through donations, the suspension of disconnections and extended payment plans, the Company was also able to support customers and other persons who struggled during the COVID-19 pandemic.
Operating income for Fiscal 2020 totalled $28.9 million, a $0.6 million decrease from operating income of $29.5 million for the year ended December 31, 2019 (“Fiscal 2019”). This decrease is primarily attributable to a 3.5% decrease in kWh sales and higher depreciation costs in Fiscal 2020. These items were partially offset by 0.9% and 6.6% base rate increases effective June 1, 2019 and June 1, 2020, respectively.
Net earnings for Fiscal 2020 were $26.1 million, a $3.0 million decrease from net earnings of $29.1 million for Fiscal 2019. This decrease is primarily attributable to lower operating income, higher finance charges and lower other income.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Fiscal 2020 were $25.1 million, or $0.74 per Class A Ordinary Share, as compared to $28.1 million, or $0.84 per Class A Ordinary Share for Fiscal 2019. The Company calculates earnings per share on the weighted average number of Class A Ordinary Shares outstanding. The weighted average number of Class A Ordinary Shares outstanding were 34,126,137 and 33,322,444 for Fiscal 2020 and Fiscal 2019, respectively. The Company successfully completed a Rights Offering on October 29, 2020. The Rights Offering raised gross proceeds of $47.8 million through the issue of 3,359,362 Class A Ordinary Shares.
Capital expenditures net of contribution in aid of construction for Fiscal 2020 were $53.4 million, a $7.2 million or 12 % decrease from $60.6 million in capital expenditures for Fiscal 2019. President and CEO, Mr. Richard Hew says, “The Cayman Islands effectively managed to avoid the health crisis that the COVID-19 pandemic brought to other jurisdictions in 2020, and, apart from the tourism industry, the economy proved very resilient. The impact to CUC was mainly through the reduction in electricity sales to large office buildings and hotels as well as the thousands of tourism workers who departed Grand Cayman. Company operations were also impacted by the curtailment of travel by overseas specialists required to conduct critical maintenance and repairs. Despite these setbacks, the Company improved its customer satisfaction and reliability results over 2019, completed a Rights Offering to pay down debt, pared costs and capital expenditures to maintain financial stability and delivered reasonable earnings in the circumstances. Importantly, the Company also submitted a proposal for a utility scale solar plus battery storage project to the regulator for consideration. In addition, the Company retained its Investor in People Gold accreditation, a testament to the fact that it is committed to developing its people for future success. I sincerely thank our employees for all that they did in 2020 as the Company remained committed to delivering safe, reliable, least-cost and sustainable electricity to
our customers.”
The Company continues to facilitate the connection of renewable energy sources to the grid through its Consumer Owned Renewable Energy and Distributed Energy Resources programmes. At December 31, 2020, there were 587 customers connected with 7,735.66 kilowatts of renewable capacity.
Sales for Fiscal 2020 were 644.3 million kWh, a decrease of 23.4 million kWh or 3.5% when compared to 667.7 million kWh for Fiscal 2019. Sales for Fiscal 2020 were negatively impacted by a decrease in the kWh consumption of Large Commercial customers driven by the impact of the COVID-19 pandemic on the Cayman Islands’ economy. The decrease in the Large Commercial customers’ kWh consumption was partially offset by the increase in kWh consumption of Residential Customers and a 2% growth in overall customer numbers in Fiscal 2020 compared to Fiscal 2019.