Warm year end boosts CUC profits for 2009

| 11/02/2010

(CNS): The president of Grand Cayman’s monopoly power provider has said he is very pleased with Caribbean Utilities Company results for the last quarter of 2009. The year end brought a 79%increase on the same period in 2008 as a result of drier warmer weather. According to a release form CUC the company’s net earnings grew by $2.6 million to $5.9 million from net earnings of $3.3 million for the three months to 31December in 2008 due to an 11% kWh sales growth quarter over quarter.

 “We are pleased with the Company’s performance this quarter which was helped by the relatively warm and dry weather for the period as compared to last year,’ President and CEO of CUC Richard Hew said.

Although temperatures fell in January in December customers appear to have helped boost CUC coffers by running their a/c units more than the year before. In 2008 Hew said CUC earnings were negatively impacted by cooler than average temperatures, higher than average rainfall and the passage of Hurricane Paloma. An increase in electricity consumption in the last quarter of 2009 however, also helped to make 2009 a profitable year for the power firm.

Although temperatures fell in January in December customers appear to have helped boost CUC coffers by running their a/c units more than the year before. In 2008 Hew said CUC earnings were negatively impacted by cooler than average temperatures, higher than average rainfall and the passage of Hurricane Paloma. An increase in electricity consumption in the last quarter of 2009 however, also helped to make 2009 a profitable year for the power firm.

“Although growth in sales on the island has slowed compared to recent years, the Company has managed to minimize the effect on earnings through reduced capital and other expenditures and will continue to seek opportunities to operate the business within the available financial resources.”

Net earnings for the twelve months ended December 31, 2009 were $20.0 million, the firm stated, representing a 1% or $0.2 million increase from net earnings of $19.8 million for the twelve months ended December 31, 2008.

CUC said its profit was down to a combination of a 2% kWh sales growth and lower general and administration, consumer service and promotion, transmission and distribution, maintenance and finance costs in 2009.

The firm also said the introduction of a fuel tracker mechanism in the Company’s 2008 Transmission & Distribution Licence has eliminated favourable or adverse timing differences in fuel cost recovery.

Operating revenues decreased 18%, or $9.6 million, to $43.9 million for the three months ended December 31, 2009 from $53.5 million for the three months ended December 31, 2008. Operating revenues decreased 24%, or $49.2 million, to $158.8 million for the twelve months ended December 31, 2009 from $208.0 million for the twelve months ended December 31, 2008. Operating revenues are lower mainly due to lower fuel factor revenues in 2009 driven by lower fuel costs.

Hew also said that reliability was 99.96% which exceeded the 2008 results. “CUC will strive to maintain this performance through the completion of capital projects such as the Rum Point to Frank Sound transmission line and other operational improvements.”

The firm also confirmed that the Board of Directors has declared a dividend of US$0.165 per Class A Ordinary Share, or an annualized dividend of US$0.66 per share. The dividend will be payable March 15, 2010 to shareholders of record February 22, 2010.

The full report can be accessed at www.cuc-cayman
 

Category: Business

Comments (5)

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  1. Anonymous says:

    Of course they are making a good profit, the Caymanian public pays for it each month as agreed by our Government, remember?!

  2. Bobby Anonymous says:

    Why can’t I gat my deposit back?  C.U.C. have had my deposit for near twenty years now and I have never had a late payment. I bet all the deposits add up to a nice lump that pays a darn bit more interest that what I get every month from them.

    While I am on the subject about being taking for a song, lets look at the water meter scam. A meter costs 50.00 CI, they charge me 5.00 CI a month rental, so twenty years X 12 months X 5.00 CI = 1200.00 CI. And when the meter goes wrong they guess what the bill should be and stick you for it. Now hold on, what happened to, Your meter, your problem so your loss?

    • Anonymous says:

      Water meter, that story .I would like to purchase the one connected ,say $100.00 that double the cost.

      Let all get together and force the issue.

       

  3. Anonymous says:

    Does that mean that CUC will give the consumer a rebate when their earnings exceed the guaranteed percentage ROI?

    • Anonymous says:

      There would be a reduction of fees if (a) CUC’s return on rate base reaches 13%; or (b) if the CPI is negative. (a) is very unlikely to happen in a recession (it is probably currently between 10 and 11%),  but (b) is possible.