Caribbean Utilities Company reported an operating income of US$5.6 million in the second quarter of 2020, a decrease of $2.6 million compared to the same period last year. Second quarter net earnings of $4.5 million were $3.4 million lower than in the second quarter of 2019.
CUC said the results “reflect the impact COVID-19 has had on our business and Grand Cayman’s economy”, according to a press release.
The decline in operating income is mainly the result of lower electricity-sales revenues and higher depreciation, maintenance and consumer-services expenses.
Despite an increase in the number of customers during the past year from 30,100 to 30,704, the lower average consumption of commercial customers due to the COVID-19 pandemic depressed second-quarter sales. Electricity sales dropped by 7.5 million kilowatt hours, to 165.5 million kWh from 173.0 million kWh in Q2 2019.
This decrease was only partially offset by the higher average consumption of residential customers as air-conditioning usage increased with more people working from home.
CUC president and CEO, Richard Hew said in the release, “The COVID-19 pandemic severely impacted Grand Cayman’s economy throughout the second quarter with the airport remaining closed, the tourism industry shuttered and significant numbers of residents unemployed.”
In addition, higher finance charges driven by higher long-term debt and a lower Allowance for Funds Used During Construction impacted CUC’s net earnings.
The six-month operating income in 2020 dropped by $2.8 million to $10.4 million, compared to the first half of 2019. Net earnings in the first two quarters of $8.3 million were down by $4.2 million from $12.5 million during the first six months of last year.