CUC squeezes profit despite mechanical problems

| 05/05/2011

(CNS): Grand Cayman’s power provider still managed to make a profit in the first quarter of 2011 despite the numerous challenges the company faced with explosions and multiple generator failures. During the three months ending 31 March the Caribbean Utilities Company (CUC) had a marginal growth in sales, earnings and total customers. Net earnings for the First Quarter 2011 increased by $0.6 million to $3.1 million in comparison to $2.5 million for the first quarter 2010. The total number of customers as at the end of the first quarter 2011 was up by 2% at 26,261 compared to 25,676 during the same three months of 2010.

President and CEO Richard Hew said the power company was focused on containing expenditure while continuing to invest in existing and new assets but acknowledged there had been equipment problems.

“The first quarter was a challenging one operationally with generation plant failures that unfortunately caused injuries to two of our employees and led to customer outages,” he said. “However we have responded positively and are confident that our operations will be returned to normal by midyear.”

During the firstquarter 2011, the Electricity Regulatory Authority approved the company’s proposed 2011-2015 capital investment in the amount of $134 million, excluding generation expansions which are subject to a competitive bid process.

Earnings on Class A Ordinary Shares for the first quarter 2011, after adjustment for dividends on the Class B Preference Shares were $3.0 million, or $0.11 per Class A Ordinary Share, compared to $2.3 million, or $0.08 per Class A Ordinary Share for the first quarter 2010.

During the first quarter the average price per gallon of fuel was $4.26, an increase of 35% when compared to $3.15 for the same period in 2010. As a result the firm said, in its report that the cost of fuel and its impact on customers and the economy continues to be a concern. The company, with the approval of the Electricity Regulatory Authority (ERA), has recently entered into hedging transactions to effectively cap the price on a portion of its fuel purchases.
 

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Comments (16)

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  1. Anonymous says:

    CUC managed to squeeze profit? Good! Cause I felt that I had been squeezed too when I paid my last electricity bill…

  2. sweet sweet dividends says:

    Well.. since they are always making money and you have no choice but to consume their electricty why complain..you can go in a buy shares in the company and get dividends and you will make a nice profit off yourself. I mean that is an automatic way to cut your bill if they are paying you to save your money with them. But instead some people would rather buy 100 electrical devices and maybe soon an electric car andcomplain about their bill.. this world is odd when people complain about something that is entirely in their control. In fact, if you cut off you ac save a couple hundred dollars a month and invested in CUC in 5 years you could probably trun your AC all summer and your dividends would cover your bill every year

  3. Anonymous says:

    It’s noteable that the number of customers went up–a sign the recession is ending

  4. Anonymous says:

    Now who is really surprised by this??

  5. Anonymous says:

    OK lets see

    "Net" earnings went from 2.5m to 3.1m – an increase of 24%

    Share dividends went from 2.3m to 3.0 m – an increase of 30%

    Number of customers went up 2%?

    Where did the extra money come from? US!!!

  6. Anonymous says:

    CUC…a company with no conscience

    It never ceases to amaze me that this company that claims to always give something back to the community couldn’t use it’s corporate "conscience" and give at least the residential people of this island a break if  only for just  a couple of months this summer.

    Greed!…Greed !!…Greed!!!

    • Anonymous says:

      While you’re at it, let’s ask Fosters, Hurleys and Kirks to give us a break too, or maybe some bread.

  7. Anonymous says:

    CUC has to make a profit – we must have one of the highest rates for electricity in the world…when you have a home of no more than 1100sq ft at which everything is off from 7:30am – 4:pm and a/c isonly used between 8/9pm – 6am (at 78 degrees) and the pre-summer bill is still in the range of CI$350 how could they possibly be at anything but a profit?

    • Anonymous says:

      You clearly need an energy audit! I have 3,000 sq feet and pay attention to everything, including ac, and the bills averaged $279 per month over the past 12 months. It can be done.

      • Anonymous says:

        I agree!   I have a 1900 sq ft house, and my electrical was CI$141.00 and yes I do use the a/c nightly 9pm-6am at about 79 degrees.  Of course, perhaps I should factor in that I have a gas stove, my water heater is on a timer if on at all since it is so hot these days and I changed all my bulbs to flourescent and 1 maybe 2 to LED.   Perhaps, you need to service your appliances, or invest in some energy saver ones.   Just a thought.  =)   We all need to stop complaining and really look at where we can cut back.   Dont wait until your electricity is through the roof and you've been disconnected to realize what you could live without/reduce consumption.

  8. Anon says:

    It is alright to write about a subject you not know nothing about. But at least give people a clue that you know, you don’t know what you are talking about. Please do not try to be smart if you are not.

  9. Anonymous says:

    Please excuse my lack of knowledge in this area. I get that profit is what is made after expenses are paid but given that CUC has no competition so no need to lower rates to attract customers, and given that they can charge whatever they want, and given that they strategically increase their rates during hotter months – how would CUC ever been in a position or in circumstances where a loss was made?

    • Anonymous says:

       Your lack of knowledge in this area is evident, so therefore, I’m sure you will understand that it is not excused. I often wonder why people who KNOW they are not knowledgeable just KEEP ON TALKING! It blows my mind.

      "and given that they can charge whatever they want". You may need to get more knowledge here.

      "and given that they strategically increase their rates during hotter months"… More knowledge here too. Might want to turn down your A/C during the hotter months too.

      Just saying…

      • Anonymous says:

        The poster admits to not knowing and then asks questions seeking to understand, which is reasonable.

        You can type and post messages which are not reasonable.

        Just saying…

        • Anonymous says:

           You are correct that the poster admitted to not knowing, but it doesn’t appear as if they asked questions to gain understanding. They made statements that appeared as facts.

          Saying "granted that the sky is green" is not questioning the color of the sky. It is making a statement that the sky IS green. That’s how I read it.

      • The I In Aluminium says:

        Your inability to make a coherent point is evident, and I am sure you will understand why no-one ever listens to you. 

        I often wonder how people who have nothing to say just keep ontyping mindless responses.  I had a theory it was because someone had blown their tiny minds.  Thanks for the confirmation.

        Just saying.