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, July 31, 2020 /CNW/ - 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, 2020 (all dollar amounts are stated in United States dollars).
Results for the Company for the three months ending June 30, 2020 ("Second Quarter 2020" or "Q2 2020") reflect the impact COVID-19 has had on our business and Grand Cayman's economy.
Operating income for Q2 2020 totalled $5.6 million, a decrease of $2.6 million when compared to operating income of $8.2 million for the three months ending June 30, 2019 ("Second Quarter 2019" or "Q2 2019"). The decrease is primarily attributable to lower electricity sales revenues and higher depreciation, maintenance and consumer services expenses.
Net earnings for Q2 2020 totalled $4.5 million, a decrease of $3.4 million from $7.9 million for Q2 2019. In addition to the items impacting operating income, net earnings were also negatively impacted by higher finance charges driven by higher long-term debt and lower 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 2020 were $4.4 million, or $0.13 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $7.8 million, or $0.24 per Class A Ordinary Share for Q2 2019.
Operating income for the six months ended June 30, 2020 totalled $10.4 million, a decrease of $2.8 million when compared to operating income of $13.2 million for the six months ended June 30, 2019. The decrease is primarily attributable to higher depreciation, maintenance and transmission and distribution expenses.
Net earnings for the six months ended June 30, 2020 totalled $8.3 million, a decrease of $4.2 million when compared to net earnings of $12.5 million for the six months ended June 30, 2019. In addition to the items impacting operating income, net earnings were also negatively impacted by higher finance charges driven by higher long-term debt.
After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the six months ended June 30, 2020 were $8.1 million, or $0.24 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $12.3 million, or $0.37 per Class A Ordinary Share, for the six months ended June 30, 2019.
Sales for Q2 2020 totalled 165.5 million kWh, a decrease of 7.5 million kWh in comparison to 173.0 million kWh for Q2 2019. Sales for the six months ended June 30, 2020 totalled 317.9 million kWh, a decrease of 1.5 million kWh in comparison to 319.4 million kWh for the six months ended June 30, 2019. The decrease in sales for Q2 2020 and the six months ended June 30, 2020 is primarily due to a decrease in the average consumption of large and general commercial customers due to the Covid-19 pandemic. The decrease was partially offset by an increase in the average consumption of residential customers as air conditioning usage increased with more persons working from home.
Second Quarter 2020 also saw an increase in our customer base. Total customers as at June 30, 2020 were 30,704, an increase of 604 customers, or 2%, compared to 30,100 customers as at June 30, 2019.
President and CEO, Mr. Richard Hew, stated, "The COVID-19 pandemic severely impacted Grand Cayman's economy throughout the second quarter with the airport remaining closed, the tourism industry shuttered and significant numbers of residents unemployed. Throughout the period CUC continued to deliver safe and reliable electricity service to its customers even to those who experienced difficulties paying their bills. I wish to express sincere thanks to all the public service officials and local vendors for their assistance with logistics and supplies and CUC employees for their exceptional work and dedication during the crisis period."
CUC's Second Quarter 2020 results and related Management's Discussion and Analysis ("MD&A") for the period ended June 30, 2020 are attached to this release and incorporated by reference and can be accessed by clicking the link at the end of this release.
The MD&A section of this report contains a discussion of CUC's unaudited 2020 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 2020 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.
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.
SOURCE Caribbean Utilities Company, Ltd.