CUC Announces Fourth Quarter and Twelve Month Results for the Period Ended December 31, 2011

    




 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, Feb. 9, 2012 /CNW/ - Caribbean Utilities  Company, Ltd. ("CUC" or the "Company") announced today its unaudited  results for the fourth quarter and twelve months ended December 31,  2011 (all figures in United States dollars). 

 Net earnings for the three months ended December 31, 2011 ("Fourth  Quarter 2011") were $5.1 million. This represents an increase of 9%, or  $0.4 million, from net earnings of $4.7 million for the three months  ended December 31, 2010 ("Fourth Quarter 2010"). This increase in  earnings is the result of an increase in electricity sales and a  decrease in maintenance and transmission and distribution expenses as  the Company continued to focus on reliability driven capital upgrade  projects during the period.  Electricity sales were positively impacted  by warmer weather conditions during the Fourth Quarter 2011 versus the  same period last year.  Overall, kilowatt- hour (kWh) sales for 2011  were flat at 554.0 million. 

 Net earnings for the twelve months ended December 31, 2011 were $20.4  million, representing a 3% or $0.5 million increase from net earnings  of $19.9 million for the twelve months ended December 31, 2010. With  flat kWh sales, this increase in earnings was driven by an increase in  other income and lower financing and maintenance charges. 

 Higher fuel prices and 4% kWh sales growth drove operating revenues up  by 22%, or $10.3 million, to $57.7 million for the Fourth Quarter 2011  as compared to $47.4 million for the Fourth Quarter 2010.  Operating  revenues increased 21%, or $38.0 million, to $218.1 million for the  twelve months ended December 31, 2011 from $180.1 million for the  twelve months ended December 31, 2010.  The increase in operating  revenues was a result of higher fuel factor revenues in 2011 due to an  increase in fuel prices.   The average Fuel Cost Charge rate per kWh  charged to consumers for the twelve months ended December 31, 2011 was  $0.27, a 35% increase from $0.20 per kWh for the twelve months ended  December 31, 2010.  Actual fuel and lubricating costs are passed on to  consumers without mark-up. 

 After the adjustment for dividends on Class B Preference Shares,  earnings per Class A Ordinary Share for the Fourth Quarter 2011 of  $0.15 was comparable to earnings per Class A Ordinary Share for the  Fourth Quarter 2010.  After the adjustment for dividends on Class B  Preference Shares, earnings per Class A Ordinary Share for 2011 was  $0.68, an increase of 1% over earnings per Class A Ordinary Share in  2010 of $0.67. 

 Richard Hew, President and Chief Executive Officer of the Company  stated, "The year under review has been a challenging one for CUC and  the Cayman Islands.  However, the Company was able to finish the year  on a positive note with some earnings growth. This is a direct result  of steps taken to control the Company's discretionary operational  expenditures while maintaining our focus on safety, efficiency and  service reliability.  We anticipate that this focus will remain as the  economy slowly emerges from this recession." 

 Capital expenditures for the Fourth Quarter 2011 were $10.8 million, a  $5.3 million, or 96% increase from $5.5 million in capital expenditures  for the Fourth Quarter 2010.  Capital expenditures for the twelve  months ended December 31, 2011 were $40.6 million, a $19.2 million, or  90% increase from $21.4 million in capital expenditures for 2010.   Excluding capital expenditures related to repair of units damaged  earlier in the year, for which the cost was covered by insurance  proceeds (net of deductible), capital expenditure initiatives for 2011  totaled $34.0 million and included the initiation of the Advanced  Metering Infrastructure (AMI) project roll-out and completion of the  Eastern Transmission Loop.  By the second quarter of 2012 the AMI  project will bring efficiencies in meter reading and services such as  disconnects and reconnects directly from CUC's offices, provide near  real-time electricity consumption information and a 'pay as you go'  payment option to aid consumers in monitoring and controlling their  electricity consumption.  

 The Eastern Transmission Loop project will also bring customer benefits  through an increase in the reliability and operational flexibility of  the Transmission and Distribution System serving all areas of the  island from South Sound, east to the districts of East End and North  Side. 

 In November 2011 CUC issued a certificate of need to the Electricity  Regulatory Authority (ERA) for 18 megawatts (MW) of new generating  capacity to be installed in 2014 and for an additional 18 MW of  generating capacity to be installed in either 2015 or 2016 contingent  on growth over the next two years. The primary driver for the new  generating capacity in 2014 is the upcoming retirements of several of  CUC's generating units which are reaching the end of their useful  lives.  As a result of CUC expressing its need for replacement  capacity, the ERA will be conducting a competitive solicitation in 2012  in accordance with CUC's licences which will allow all interested and  qualified parties, including CUC, to submit bids to fill the Company's  firm capacity requirement. 

 The Company also recently conducted and completed a competitive bidding  process to fill 13 MW of non-firm renewable energy capacity.  There are  currently no viable renewable energy sources in Grand Cayman that meet  CUC's reliability requirements for firm capacity, however, CUC expects  that there are third parties that can build and maintain renewable  energy plants on the island and sell energy to CUC at a competitive  price to diesel. 

 Mr. Hew added that, "CUC welcomes the competitive bidding process which  is being conducted by the ERA for replacement of the retiring firm  capacity and also looks forward to completing the bid evaluations which  will move the island closer to having medium-to-large scale renewable  energy sources. With the Government projecting modest Gross Domestic  Product (GDP) growth for 2011, which impacts the rate outlook for the  Company, we remain cautiously optimistic about future growth in the  economy and a resumption of growth in electricity demand and believe  the Company is well positioned to continue to serve the island in an  efficient and reliable manner at least cost, while providing a fair  return to our shareholders." 

  

 This report contains a detailed discussion of CUC's unaudited fourth  quarter financial results, the Cayman Islands economy, liquidity and  capital resources, capital expenditures and the business risks facing  the Company. The release and Fourth Quarter Report 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 2029 and an exclusive  Electricity Transmission and Distribution Licence expiring in 2028.   Further information is available at www.cuc-cayman.com. 

 CUC includes forward-looking statements in this material.  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 Management's Discussion and Analysis for the twelve month period ended December 31, 2010, 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.




PDF with caption: "CUC's Fourth Quarter Report for the period ended December 31, 2011 can be accessed by clicking the link below.". PDF available at:  http://stream1.newswire.ca/media/2012/02/09/20120209_C3082_DOC_EN_9981.pdf




Caribbean Utilities Company, Ltd.


CONTACT:  Letitia LawrenceVice President Finance and Chief Financial OfficerPhone:  [phone]E-Mail:  [e-mail] 


    

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