CUC declares dividend for shareholders
(CNS): Despite the economic turmoil, at home and abroad, shareholders in Caribbean Utilities Company, Ltd received good news yesterday when the power company’s Board of Directors declared a dividend of just over 16 cents for its shareholders. CUC said Class A Ordinary shares had an annualized dividend of US$0.66 per share which will be payable on June 15, to shareholders of record May 21, 2010. CUC is still the sole power provider on Grand Cayman, under what is now a non-exclusive Electricity Generation License which expires in 2029 and an exclusive Electricity Transmission and Distribution License expiring in 2028.
Further information is available at www.cuc-cayman.com.
Category: Business
I wonder if CUC is still using non-GAAP accounting to cap their ROE at 15% to stay below the old contract hurdle. They needed to keep the ROE below 15% in order to be able to raise their rates.
They used an illusory fx gain to move income out of operating income into "other income" which didn’t count towards the ROE hurdle.
They used this accouting methodology for years and years – I guess the government auditors either didn’t understand or didn’t care.
The only reason this might have changed is if the new contract took out the 15% hurdle.
1. The old licence used 15% RORB rather than ROE as their guaranteed return.
2. Under the new licence there are no guaranteed returns. Rate increases will depend upon a combination of the CPI and the RORB. If CPI is zero (and we have recently seen the report from the ESO about deflation in Cayman) then it will not be entitled to a rate increase.