CUC says profits dipped because of ‘cool’ weather

| 07/08/2009

(CNS): Following CUC’s announcement that its profits were down 6% in the year’s second quarter compared to 2008, it said today that shareholders will see an annualized dividend of US$0.66 per share. The dividend will be payable 15 September 2009 to shareholders of record as at 21 August, 2009. CUC explained that the reduction in earnings was down to lower than average temperatures throughout the first half of 2009 which pushed down electricity sales. It also noted that a change to its reporting period had impacted the results.

 

In August of 2008, the Company announced it would change its year end to 31 December so the analysis for the six months ended 30 June, 2009 includes comparisons to the six month period ended 31 July 2008.  CUC said its net earnings for the second quarter of 2009 were $5.0 million which represented a 6% or $0.3 million decrease from net earnings of $5.3 million for the three months ended 31 July3 2008. Net earnings for the first half of 2009 were down $2.2 million which it said was down to varying temperatures and negative sales growth.

“Comparison of earnings in the first half of 2009 to the six months ended 31 July, 2008 includes, due to timing, the favourable fuel cost recovery of $2.5 million for the three months ended 30 April, 2008,” the firm stated. “The introduction of a fuel tracker mechanism in the Company’s 2008 Transmission and Distribution Licence has eliminated favourable or adverse timing differences in fuel cost recovery in the financial reporting quarters since April 2008.”

President and CEO of CUC Richard Hew said that given the circumstances the power firm was doing well. “CUC remains a strong and stable company despite the economic downturn and consequent budget and other resource constraints,” he added.

During the second quarter of 2009, CUC closed the first tranche of a private placement of 7.50% Senior Unsecured Notes in the amount of $30 million. The second tranche of $10 million closed in early July giving the firm access to working capital. “The availability of this capital to repay short-term indebtedness and to finance ongoing additions and upgrades to our systems, demonstrates the continued financial strength of the Company,” Hew noted.

Although electricity sales were down the company said the number of customers had increased connected. CUC said that 222 customers were connected during the second quarter of the year, 171 residential and 51 commercial connections. . Total customers on 30 June 30 2009 were 25,068 which CUC stated was an increase of 4% over the 24,167 customers as at 31 July 2008.

Customer growth contributed to a new system peak load of 94.4 Megawatts up by 2% and a further new system peak load has been recorded since the end of this period at 95.9 MW on 21 July, 2009.

Currently CUC has more than enough generating capacity to cover the peak loads with an installed generation capacity of 136 MW at present and an obligation to add another 16MW by September this year. 

“We will continue to monitor the global and local economies and to build flexibility into our financial plans to enable us to respond to any changes in the business environment,” Hew said. “In view of the current economic downturn, CUC continues to take the necessary steps to ensure that our business remains efficient and effective,” Hew said.

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Comments (2)

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  1. electroman says:

    what we need to do is establish a forum where people can send in their tips on how to conserve electricity! in this day and year there are still alot of people who are not conscious about electricity consumption! this would be a great way to educate the people of these islands, help bring down our country’s deficit and save MOTHER EARTH! what do you think CNS!!

    CNS: Great idea! As it happens, we have just developed a public forum. Click on Forum on the main menu bar at the top and start a new Forum topic. Of course we can’t make people read it but you can email the link to anyone you think might be interested. We just launched this yesterday, so we’d be grateful for feedback. You can email me here.

  2. Adapted says:

    I beg to differ, not cooler temperatures, but smarter customers, alot of us were shocked;) to our senses with the bills we received last summer. I for one, was the type of customer who foolishly kept my A/C at 77 degrees all day long  last year only to be given a near heart attack when I first saw my bill from July last year almost hit $700! and have the sametrend in the following months despite the numerous efforts to conserve. The rates basically caused me to turn my A/C to 85 and turn off my water heater all together and reduce other luxuries like fully cooking my food, well actually no 🙂 I was being sarcastic with that last one, and got a wonderful drop of almost $400 in my usage. I would rather adapt to the warmer temperature in my house and live off ice pops and cold water this summer than pay CUC for wasteful usage and not be able to spend it on something more important to my survival…like food.