Company Announcements

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 7, 2025 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC or the "Company") announced its consolidated unaudited results for the three months ended March 31, 2025 ("First Quarter 2025" or "Q1 2025") (all figures stated in United States Dollars).   

Highlights for the period were as follows:  

• Approval of the majority of the 2025-2029 Capital Investment Plan ("CIP") by the regulator. The capital plan will enable further investments in grid hardening, customer affordability programmes, and projects to support low-carbon energy transformation.

Customer Affordability

• Upgrades to existing thermal generation have led to improved fuel efficiency. Decreasing fuel prices, the aforementioned upgrades, combined with the implementation of battery energy systems ("BESS"), have led to the successful reduction of fuel factor charges for customers by 20% for Q1 2025 when compared to the three months ended March 31, 2024 ("First Quarter 2024" or "Q1 2024"). Fuel costs are passed through to consumers on a two-month lag basis with no markup. 

Financial Growth

• Capital expenditure of $21.9 million was primarily related to distribution system extension and upgrades, life cycle upgrades of generating units and resiliency projects.
• Net earnings for the First Quarter 2025 were $7.6 million, a $1.4 million increase compared to net earnings of $6.2 million for the First Quarter 2024.
• 2% increase in kilowatt-hour ("kWh") sales.
• For Q1 2025, the quarterly dividend for Class A shares was $0.185 per share compared to $0.18 of Q1 2024

"CUC is committed to delivering investments that are both affordable and environmentally beneficial for our customers. Investments in capital projects, namely the life cycle upgrades to generating units and the battery energy systems ("BESS") have proven to be prudent investments as customers have seen a reduction in fuel factor rates on their bills. CUC is committed to ensuring our customers receive reliable, safe, sustainable and affordable energy," said President and CEO, Mr. Richard Hew.

Net Earnings and Sales Revenues 

Net earnings for Q1 2025 were $7.6 million, a $1.4 million increase from net earnings of $6.2 million for the First Quarter of 2024. This increase is primarily attributable to higher operating income and higher net other income. Net Other Income for three months ended March 31, 2025, was $1.2 million, a $0.6 million increase compared to $0.6 million for three months ended March 31, 2024.

In Q1 2025, sales reached 170.8 million kWh, a 2% increase—or 2.7 million kWh—compared to Q1 2024. This growth was fueled by an expanding customer base and a 4% rise in sales among large commercial customers. During the first three months of 2025, the Cayman Islands welcomed 144,395 stay-over visitors, up 5.3% from the same period in 2024, underscoring the economic growth driving higher energy demand, particularly within the tourism sector.

After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Q1 2025 were $7.5 million, or $0.18 per Class A Ordinary Share, as compared to $6.0 million, or $0.16 per Class A Ordinary Share, for Q1 2024. 

Key Updates

In October 2024, the Company submitted its 2025-2029 Capital Investment Plan ("CIP") to the Utility Regulation and Competition Office ("URCO" or the "Regulator") for approval. In February 2025, URCO approved the majority of projects included in the CIP, with two exceptions requiring further consideration.  The 2025-2029 CIP approved by URCO amounts to $430 million, with $60 million related to grid hardening, $6.6 million related to customer energy efficiency, and $2.6 million related to low carbon energy transformation. 

The Company submitted a Certificate of Need ("CON") to URCO on June 7, 2024, as specified in the Company's Transmission and Distribution Licence (2008). In recognition of the evolving energy demand on Grand Cayman, the submitted CON included four scenarios. CUC recommended a scenario that involved the addition of 36.1 MW of thermal capacity and 100 MW of solar plus storage to be connected by June 1, 2027. If accepted, the proposal will reduce consumer costs and meet or exceed the incremental targets of the NEP by 2027, achieving 39% renewable energy penetration and reducing CO2 emissions by 28% compared to 2019 levels.  On April 25, 2025, URCO issued the Final Determination on the CON. The approved scenario involves 90.1 MW of thermal capacity only. CUC is currently reviewing the Final Determination.

CUC remains committed to pursuing innovative and cost-effective solutions that ensure energy reliability, affordability, and sustainability for the community. 

CUC's First Quarter 2025 results and related Management's Discussion and Analysis ("MD&A") are attached to this release and incorporated by reference.  The MD&A section of this report contains a discussion of CUC's unaudited First Quarter 2025 results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and the First Quarter 2025 MD&A can be accessed at www.cuc-cayman.com (Investor Relations/Press Releases) and at www.sedarplus.ca. 

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 License" 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.   

SOURCE Caribbean Utilities Company, Ltd.