CARIBBEAN UTILITIES COMPANY, LTD. (CUC) ANNOUNCES 2023 YEAR END RESULTS AND STRATEGIC MILESTONES
Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange under the trading symbol "CUP.U".
GRAND CAYMAN, Cayman Islands, Feb. 9, 2024 /CNW/ - Caribbean Utilities Company, Ltd. ("CUC or "the Company") announced its audited results for the twelve months ended December 31, 2023 ("Fiscal 2023") (all figures are in United States Dollars).
Highlights for 2023 were as follows:
- Net Earnings increased by 17% to $38.7 million.
- 8% in kilowatt-hour ("kWh") sales.
- 1% increase in total customers.
- 9% increase in system peak demand to 124.1 megawatts ("MW").
- Capital expenditures of $97.6 million included projects to improve grid resiliency, generation asset upgrades, and construction of infrastructure to transition to lower carbon energy.
- Progress made on installation of the 20 MW Battery Energy Storage System.
- Renewable Energy supply contracts reached 20.5MW in capacity for customer programmes. The 5MW solar farm is in addition to this capacity.
- Completion of Request for Qualification for Liquefied Natural Gas ("LNG") supply procurement.
- Lifecycle upgrades for 68MW generation are in progress with expected completion of 2 of the units (32 MW) in 2024.
- Roll out of new Electric Vehicle ("EV") fleet and execution of EV charging station programme.
- System Average Interruption Duration Index ("SAIDI") is the tool used to measure the amount of outage time. In 2023, the Company achieved an average annual outage duration time of 1.7 hours per customer which surpasses the United States average 2022 results.
- Completion of phase 1 of Land Acquisition Programme to support future Renewable Energy facilities.
- Investors in People Gold certification for outstanding achievements in employee support.
- Active participation in the National Energy Policy revision through representation on the advisory council.
- Commitment to community development showcased through partnerships and support programmes.
The Company continues to deliver reliable and safe electricity service to our customers. The major projects that are aimed at reducing costs and carbon emissions, namely, the lifecycle upgrades of five engines (68MW capacity) extending their useful life, improving fuel efficiency and preparing them to operate on natural gas as well as the implementation of the battery energy storage systems, have progressed well and we look forward to the completion of these projects. During 2023 there was a new electricity peak demand record of 124.1 MW set on Grand Cayman. The annual average record temperatures experienced and the associated increase in cooling load, along with a 1% growth in connected customers, contributed to the peak demand growth and the 8% increase in energy (kWh) sales.
Net earnings for Fiscal 2023 were $38.7 million, a $5.5 million increase from net earnings of $33.2 million for the twelve months ended December 31, 2022 ("Fiscal 2022"). After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Fiscal 2023 were $37.7 million, or $1.00 per share, as compared to $32.2 million, or $0.86 per share for Fiscal 2022.
Sales in kWh for Fiscal 2023 were 727.0 million kWh which is an increase of 52.9 million kWh or 8% compared to Fiscal 2022. The increase in customer consumption and the rise in temperatures had an impact on this increase. The average temperature for Fiscal 2023 was 84.0 degrees Fahrenheit compared to 82.9 degrees Fahrenheit in Fiscal 2022. Total customers as of December 31, 2023, were 33,611, an increase of 492 customers or a 1% increase from Fiscal 2022.
Fuel Factor consists of charges from diesel fuel and lubricating oil costs, which are passed through to consumers on a two-month lag basis with no mark-up. The average Fuel Cost Charge rate charged to consumers for Fiscal 2023 was $0.24 per kWh, compared to the Fuel Cost Charge rate of $0.27 per kWh for Fiscal 2022. The average fuel price per imperial gallon ("IG") for the year ended December 31, 2023, was $4.24, compared to $4.37 for the year ended December 31, 2022. In 2022 customers also received credit in relation to fuel costs via the Cayman Islands Government funded Fuel Relief programme and the CUC Fuel Cost Relief programme.
"Strong earnings continue to place the Company in a position to support appropriate levels of capital investment in infrastructure projects that ensure that we continue to deliver safe, reliable, least cost and sustainable energy to the people of Grand Cayman," said Mr. Richard Hew, President and Chief Executive Officer.
In 2023, the Company maintained its Investors In People Gold Level Accreditation. CUC has a primary goal to recruit, retain and develop the most talented individuals within the utility industry. The Company aims to be an organization that employees choose to work for and wants to consistently demonstrate commitment to the team through active participation in our community and training programmes. This is the Company's third consecutive gold certification and underscores the Company's commitment to creating a positive work environment that fosters growth, innovation, and excellence by continuously investing in our people.
The Company made good progress on preparing Grand Cayman for a transition to renewable energy as a primary resource. Partnerships with key suppliers through Engineering, Procurement and Construction contractors for Solar plus Storage projects were secured and plant designs were prepared for tender as the Company readied to bid for the expected OfReg competitive solicitation for utility scale solar.
While the renewable energy market is being developed, the Company continues to make meaningful strides with its contribution to the National Energy Policy's carbon reduction goals. In 2023, the Company rolled out the EV Charging Station programme. The project aims to provide additional public charging stations throughout the island. By creating this programme, customers now have easier access and more options to charging stations. By the end of 2024, it is anticipated that 20 additional charging stations will be installed and activated across the island.
Considerable progress has been made on the Battery Energy Storage project. At the end of January 2024, the Company will have completed the first set of the 10MW installation at its Hydesville, West Bay Sub-Station. The batteries will assist with the transition from diesel generated energy dependency and provide a reduction in carbon emissions and cost savings for our customers.
The Request for Qualification ("RFQ") for the supply of liquefied natural gas was completed in 2023, in line with the National Energy Policy and the Company's Integrated Resource Plan. CUC is committed to increasing the use of cleaner energy, reducing energy costs and to reducing greenhouse gas emissions over the long term. This Battery Energy Storage System and the conversion of the engines to utilise natural gas will assist with these primary goals.
Capital Expenditures for Fiscal 2023 were $97.6 million, an increase of $1.8 million from capital expenditures for Fiscal 2022. These expenditures were in primarily related to the following projects:
- Distribution system extension and upgrades
- Generation replacements
- Lifecycle upgrades
- Alternate energy technologies
- Installation of utility scale battery storage, which is ongoing,
- Facility and auxiliary asset replacement costs, and other resiliency projects
The above capital projects will enhance the reliability and safe delivery of electricity service to the customers of Grand Cayman. Most of these projects will also assist in the reduction of carbon emissions, which is in line with the Company's target of 60% reduction of emissions by 2030. These projects will also assist the Company with providing better cost-saving solutions to customers as CUC transitions to more renewable energy sources.
CUC's Annual 2023 results and related Management's Discussion and Analysis ("MD&A") are attached to this release and incorporated by reference. The MD&A section of this report contains a discussion of CUC's 2023 results for the twelve-month period ended December 31, 2023, the Cayman Islands economy, liquidity and capital resources, capital expenditures and the business risks facing the Company. The release and 2023 annual results 2023 MD&A can be accessed at www.cuc-cayman.com (Investor Relations/Press Releases) and at www.sedarplus.ca.
The principal activity of the Company is to generate, transmit and distribute electricity in its licence area of Grand Cayman, Cayman Islands, pursuant to a 20-year Transmission & Distribution ("T&D") Licence and a 25-year non-exclusive Generation Licence (the "Generation Licence" and together with the T&D licence, the "Licences") granted by the Cayman Islands Government (the Government", "CIG"). The T&D Licence, which expires in April 2028, contains provisions for an automatic 20-year renewal and the Company has reasonable expectation of renewal until April 2048. The Generation Licence expires in November 2039.
Further information is available at www.cuc-cayman.com.
Certain statements in the MD&A, other than statements of historical fact, are forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to the Company and its operations, including its strategy and financial performance and condition. Forward looking statements include statements that are predictive in nature, depend upon future events or conditions, or include words such as "expects", "anticipates", "plan", "believes", "estimates", "intends", "targets", "projects", "forecasts", "schedule", or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could". Forward looking statements are based on underlying assumptions and management's beliefs, estimates and opinions, and are subject to inherent risks and uncertainties surrounding future expectations generally that may cause actual results to vary from plans, targets and estimates. Some of the important risks and uncertainties that could affect forward looking statements are described in the MD&A in the section labeled "Business Risks" and include but are not limited to operational, general economic, market and business conditions, regulatory developments and weather. CUC cautions readers that actual results may vary significantly from those expected should certain risks or uncertainties materialize, or should underlying assumptions prove incorrect. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.
SOURCE Caribbean Utilities Company, Ltd.
Letitia Lawrence, Vice President Finance and Chief Financial Officer, Phone: (345) 914-1124, E-Mail:[email protected]
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