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Caribbean Utilities Company Ltd (CUC) Announces Unaudited Results ended June 30 2021
Caribbean Utilities Company, Ltd. (TSX: CUP.U) (“CUC” or “the Company”) announced today its unaudited results for the three and six months ended June 30, 2021 (all dollar amounts are stated in United States dollars).
The results for the Company for the three months ending June 30, 2021 (“Second Quarter 2021” or “Q2 2021”) reflect the reopening of businesses and the start of the economic recovery following the COVID -19 pandemic as this period recorded an increase in sales and earnings as well as an increase in the customer base.
Operating income for Q2 2021 totalled $8.9 million, an increase of $3.3 million when compared to operating income of $5.6 million for the three months ending June 30, 2020 (“Second Quarter 2020” or “Q2 2020”). The increase is primarily attributable to higher electricity sales revenues and lower depreciation, maintenance, and consumer services expenses.
Net earnings for Q2 2021 totalled $8.6 million, an increase of $4.1 million from $4.5 million in Q2 2020. In addition to the items impacting operating income, net earnings were also positively impacted by lower finance charges driven by lower long-term debt interest charges and higher Allowance for Funds Used During Construction (“AFUDC”).
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Q2 2021 were $8.4 million, or $0.23 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $4.4 million, or $0.13 per Class A Ordinary Share for Q2 2020.
President and CEO, Mr. Richard Hew, states that, “Grand Cayman’s economy continues to improve as reflected in the Second Quarter year over year increase in kilowatt hour (“kWh”) sales and a peak demand of 111.2 megawatts (“MW”), which is approaching the record peak of 113.5 MW set in August 2019. Further improvements in the economy and the recovery of electricity sales beyond 2019 levels depends on the successful phased reopening of the tourism industry in September through November 2021, as announced by the Cayman Islands Government and is conditional on the Islands reaching an 80% full vaccination rate. I am also pleased to report that CUC’s health and safety, environmental and reliability performances were all on, or ahead of targets set for the half year mark.
Sales for the three months ended June 30, 2021 totalled 170.8 million kWh, an increase of 5.3 million kWh in comparison to 165.5 million kWh for the three months ended June 30, 2020. The increase in sales for Q2 2021 is primarily due to economic recovery following the impact of the Covid-19 pandemic. During Q2 2020, most businesses were closed due to Government restrictions.
Sales for the six months ended June 30, 2021 totalled 314.6 million kWh, a decrease of 3.3 million kWh in comparison to 317.9 million kWh for the six months ended June 30, 2020. The decrease in sales for the six months ended June 30, 2021 is primarily due to a decrease in the average consumption of large and general commercial customers due to the Covid-19 pandemic which began to impact the economy in March 2020.
The Company continues to be engaged in discussions with the Cayman Islands Utility Regulation and Competition Office (“OfReg”) on key areas focused around renewable energy and a proposal for a 20-megawatt battery storage project and how best this project can be implemented so that customers can reap the benefits. The Company remains committed to providing an ongoing safe and reliable electricity service to all consumers while transitioning to cleaner and more sustainable resources.
Through good governance, inclusion and diversity and the creation of more strict environmental policies, the Company is taking steps to create a more sustainable platform from which to serve our stakeholders in the future.
The number of customers increased at the end of the Second Quarter 2021. The total number was 31,719, an increase of 1,015 customers, or 3%, compared to 30,704 customers as at June 30, 2020.
During this period of review, customers are being reminded to conserve the amount of energy they consume.
Mr. Hew stated that, “It is summer time and with children out of school and at home for long periods of time during the day, customers are using more electricity for air conditioning. Global fuel costs are also trending upwards, and as such we remind our customers to monitor and manage their electricity consumption to reduce costs using the smart meter consumption data and energy efficiency tips available on CUC’s website.”
CUC’s Second Quarter 2021 results and related Management’s Discussion and Analysis (“MD&A”) for the period ended June 30, 2021 are attached to this release and incorporated by reference.
The MD&A section of this report contains a discussion of CUC’s unaudited 2021 Second Quarter results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and Second Quarter 2021 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.
To read the full 2021 Quarter Report click here: https://www.cuc-cayman.com/fronthome/download_pdf?file=1627652686cuc_2nd_quarter_2021_results_290721.pdf
Submitted by: Neil Murray, Caribbean Utilities Company Limited (CUC)