Caribbean Utilities Company announced third quarter net earnings of $9.2 million, an increase of $1.5 million over the same period last year. Higher electricity sales revenues and other income, and lower general and administration expenses also caused a $600,000 year-on-year increase in net earnings during the first nine months of 2018. The results were partially offset by higher depreciation and transmission and distribution costs.
Electricity sales declined in the third quarter and were marginally lower in the first three quarters, amid wetter and cooler weather, higher fuel prices and growing customer energy efficiency. As a result, sales were hit by a 4 percent fall in average residential consumption. The number of large commercial customers also dropped compared to 2017.
However, the number of total customers grew by 2 percent over the past 12 months to 29,584 at the end of September.
Third quarter sales of 170.9 million kWh were 2.8 million kWh lower year on year, and sales for the first nine months of 2018 amounted to 471.0 million kWh, a decrease of 0.3 million kWh compared to the first three quarters of 2017.
CUC President and CEO Richard Hew said the third quarter kilowatt hour sales were lower than expected but the company was able to manage costs and deliver an increase in earnings.
“Rising world fuel prices and the negative impact on cost to serve our customers remain a concern, and the company looks forward to a rapid diversification of the energy sources on the grid during the implementation phase of the Integrated Resource Plan,” he said.
Cayman’s electricity provider is waiting for regulatory approval of its Integrated Resource Plan, which outlines a program for the rapid increase in renewable energy sources in the company’s grid.
Given sustained higher oil prices, the proposed diversification of energy sources to renewables and natural gas is expected to deliver both economic and environmental benefits.
To meet the growth in customer numbers, CUC broke ground on a new Seven Mile Beach substation in the third quarter. The substation is expected to cost $16.7 million and will be the first to incorporate medium voltage, gas-insulated switchgear technology.
“We continue our investments in leading technology such as the new Seven Mile Beach substation, which will serve our customers more reliably and efficiently for many years to come,” Mr. Hew said.
The utility provider plans to construct a similar substation to serve the Prospect area with groundbreaking anticipated in the fourth quarter of this year.
After the adjustment for dividends on the preference shares of the company, CUC declared per share earnings of $0.27 for the third quarter and $0.56 for the first nine months for its class A ordinary shares. This compares to $0.23 and $0.55 per share earnings for the respective periods last year.