CUC profits down in second quarter

The Caribbean Utility Company reported that its second quarter 2009 results were down $0.3 million compared to last year’s figures.

Company president and chief executive officer Richard Hew said in a letter to shareholders that while its sales and earnings were lower than the previous year, they were ‘in line with expectations, given the economic downturn’.

Mr. Hew said the weakened economy had negatively impacted Grand Cayman’s tourism market and consumers had increased their energy conservation.

‘In addition, lower than average temperatures have negatively impacted sales for the first half of 2009,’ he said in the letter.

Electricity sales for the second quarter of 2009 were 142.2 million kilowatt hours (‘kWh’) in comparison to 149.1 million kWh for the three months ended July 31, 2008; a decrease of 5 per cent.

For the first half of 2009, electricity sales declined by 6 per cent compared to the months ended July 31, 2008.

The company has changed its year end accounting date to 31 December, so its latest quarterly results are comparing April, May and June this year to May, June and July of 2008. The comparison of the differing periods has also impacted the results.

Net earnings for the three months ended June 30, 2009 were $5.0 million, a decrease of 6 per cent or $0.3 million from net earnings of $5.3 million for the three months ended July 31, 2008.

The company announced it had connected 222 new customers in the second quarter of this year. Of these, 171 were residential and 51 commercial. The number of customers as at June 30, 2009 was 25,068, an increase of 4 per cent over the 24,167 customers at the end of July last year.

CUC is waiting to hear if it will win a bid to develop and operate 16 megaWatts of power generation on Grand Cayman by May 2012 and another 16 MW by 2013. It is competing for the bid with Jamaica Energy Partners. The Electricity Regulatory Authority is expected to announce the bid winner this month.

CUC said it experienced a new system peak load of 94.4 MW in June 2009, up 2 per cent from the peak load of 92.9 MW recorded in June 2008.

A further new system peak load was recorded after the end of the period at 95.9 MW on July 21, 2009. Currently CUC has an installed generation capacity of 136 MW with an additional 16 MW to be in service in 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.

‘In view of the current economic downturn, CUC continues to take the necessary steps to ensure that our business remains efficient and effective’, Mr. Hew said.