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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.
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