Company Announcements

The 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 6, 2026 /CNW/ - Key highlights include Q1 2026 results reflecting cooler weather conditions; significant tourism activity, 60 years of contributions to the Caymanian economy; continued fuel cost savings passed on to customers and National Heroes Day recognition.

• Net earnings for the three months ended March 31, 2026 ("First Quarter 2026" or "Q1 2026") were $7.2 million or 17 cents per Class A ordinary share.
• Lower depreciation expense allocated for Q1 2026 due to life extension of eight generating units.
• $1.85 million in fuel costs savings were realized in Q1 2026, directly benefiting customers.
• Dividend yield remained an important driver of investor value, with an annualized dividend yield of 5.6%, supported by consistent quarterly dividend declarations.
• The tourism sector experienced its strongest winter on record, with continued growth expected to drive increased electricity demand.
• CUC shortlisted as a top ‑ ranked bidder in renewable energy procurement process.
• CUC recognised for outstanding contributions to the Cayman economy at National Heroes Day Celebrations.
• Celebratory 60 ^th Anniversary plans being implemented, including a brand refresh.

Mr. Richard Hew, CEO said: "As CUC enters its 60th anniversary year, the Company continues to be proud of its longstanding contributions to the Grand Cayman community. CUC remains focused on delivering tangible and measurable cost savings for customers, achieved through strategic infrastructure investments that improve efficiency and reliability across the electricity system. The recent brand refresh reflects both CUC's deep roots in Grand Cayman and its continued commitment to delivering value today while preparing for the future of energy."

First Quarter 2026 performance summary

Weather Impacted first-quarter performance: Net earnings for Q1 2026 were $7.2 million, reflecting a decrease of $0.4 million from $7.6 million in Q1 2025. During the quarter, the Cayman Islands experienced cooler‑than‑average temperatures and increased rainfall, which contributed to a reduction in overall electricity consumption. Cooling Degree Days ("CDD³") for the First Quarter 2026 averaged 57.8, significantly lower than 102.0 recorded in the prior year period. The reduction in CDD reflects cooler overall temperatures, which in turn reduced air conditioning usage across residential and commercial customers. The embedded chart highlights the weather-driven variance in kWh sales across customer classes for Q1 2026 compared to Q1 2025. While organic growth remained positive, its impact was outweighed by adverse weather conditions, resulting in an overall decline in kWh sales for the quarter. Residential consumption experienced the greatest impact, reflecting its sensitivity to weather conditions. Despite the weather‑related impact, total customer numbers increased by 2% compared to Q1 2025, driven by continued population and economic growth on the island.

Increased tourism visitation: Tourism activity was significant in the first quarter of 2026, with stayover arrivals reaching historic levels throughout the period. This sustained strength in tourism continues to support broad-based economic activity across the island and is expected to contribute to increased higher electricity demand as visitor numbers increase and new hotels and other properties come online.

Regulatory Approval Enhancing System Reliability and Generation Continuity: In March 2026, the Utility Regulation and Competition Office ("URCO") approved the Company's business case to extend the useful lives of several generating units that were originally slated for retirement in 2026 and 2027. The proposal was submitted to address a projected capacity shortfall driven by increased demand. This approval enables the Company to continue meeting generation requirements over the next two years and extends the depreciation period of the affected units by 10 years, resulting in a 10% lower depreciation expense when compared to Q1 2025.

CUC celebrates 60 ^th anniversary: In 2026, CUC will mark its 60^th anniversary of operations in Grand Cayman, a significant milestone that reflects the Company's longstanding commitment to serving the community. As part of this anniversary year, CUC undertook its first brand refresh in 60 years. The refresh is designed to honour the Company's deep roots in the Cayman Islands while reinforcing its forward‑looking focus on energy sustainability and the evolving needs of the island. Coinciding with the Company's 60^th anniversary celebrations, CUC received national recognition in the National Heroes Day celebrations in the category of "Builders of Cayman". This was aligned with the theme "Nation Built: The Power of Physical Infrastructure." This momentous occasion was a proud moment for the Company as it continues to support the growth of the Cayman Islands. 

Improved customer affordability through investment and innovation: During the first quarter, the Company continued to deliver fuel cost savings for customers, recording total savings of $1.85 million when compared to Q1 2025. These savings are passed directly through to customers with no markup, resulting in lower fuel costs on customer bills and supporting the Company's ongoing commitment to providing affordable and reliable energy. Operational efficiency was comparable for the quarter when compared to 2025, with net fuel efficiency at 19.20 kWh per imperial gallon. The savings reflect the continued benefit of Battery Energy Storage System installation and the Life Cycle Upgrade project. Together, these initiatives have enabled the Company to reduce thermal spinning reserve requirements by up to 50%, contributing to lower overall fuel consumption.

Government Collaboration and Fuel Relief Programme: Ongoing geopolitical uncertainty in the Middle East has contributed to a sharp rise in international fuel prices, placing increased pressure on energy costs. The Cayman Islands Government ("Government"), in collaboration with the Company, has announced a three‑phase programme designed to address affordability challenges facing households during the upcoming summer months.

The Government has confirmed that for qualifying customers, residential fuel costs in excess of CI$0.18 per kilowatt-hour (kWh) will be subsidized for consumption from June through September. This measure is expected to benefit approximately 85% of CUC's residential customers, specifically those with monthly electricity consumption ranging from 101 kWh to 2,000 kWh. The relief will be applied automatically and reflected on the monthly customer bills for the applicable period.

The Government further indicated that phases two and three of the programme will focus on expanding home energy efficiency initiatives and advancing the long-term transition to solar generation, supporting more sustainable and cost-effective energy solutions for customers.

Dispatchable Photovoltaic Request for Proposal: A transition toward renewable energy continues to gain momentum in the Cayman Islands. The Company participated in the issued Final Request for Proposal ("RFP") on July 3, 2025 by URCO for a 22.5 MW Dispatchable Photovoltaic ("DPV") plant, to incorporate battery storage to ensure dispatchability and grid stability. The Company's participation in the RFP process, with a bid submitted on October 2, 2025, reflects its ongoing commitment to sustainable growth, carbon reduction, and customer affordability. On April 29, 2026, URCO advised that the Company's submission was shortlisted as a top ranked bid in accordance with Section 4.5 of the RFP and has progressed to the final quantitative evaluation phase. The Company is preparing to participate in the mandatory Interconnection Feasibility as part of the ongoing evaluation process.

CUC's First Quarter 2026 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 2026 results, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and the First Quarter 2026 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.