CUC profits down but sales up

For the second quarter of 2022, Cayman’s electricity provider, CUC, recorded an increase in sales as well as an increase in its customer base, while its net earnings for the quarter totalled $8.3 million, a decrease of $0.3 million compared to $8.6 million for the same quarter last year.

Net earnings for the quarter were negatively impacted by an increase in general and administration expenses, customer services cost and depreciation, CUC said. This was partially offset by an increase in electricity sales revenues.

After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for Q2 2022 totalled $8.2 million, or $0.22 per Class A Ordinary Share, compared to earnings of $8.4 million, or $0.23 per Class A Ordinary Share in Q2 2021. Net earnings for the six months ended June 30, 2022 totalled $13.8 million, an increase of $1.9 million or 16% when compared to net earnings of $11.9 million for the six months ended June 30, 2021.

After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the six months ended June 30, 2022 were $13.6 million, or $0.36 per Class A Ordinary Share, compared to earnings on Class A Ordinary Shares of $11.7 million, or $0.32 per Class A Ordinary Share, for the six months ended June 30, 2021.

Sales for the second quarter of 2022 totalled 171.3 million kWh, an increase of 0.5 million kWh in comparison to 170.8 million kWh for Q2 2021. Sales for the six months ended June 30, 2022 totalled 320.7 million kWh, an increase of 6.1 million kWh in comparison to 314.6 million kWh for the six months ended June 30, 2021 (“Second Quarter 2021” or “Q2 2021”).

CUC said the increase in sales for the second quarter of this year was mainly due to a 2% increase in kWh consumption across all customer categories and a 3% growth in overall customer numbers for Q2 2022 compared to Q2 2021. There was an increase in the total customers as at June 30, 2022. The number of customers at the end of the Second Quarter 2022 was 32,553, an increase of 834 customers, or 3%, compared to 31,719 customers as at June 30, 2021.

Volatile fuel prices continued to present a challenge for CUC and its customers. Fuel factor revenues for Q2 2022 totalled $30.9 million, an increase of $9.5 million, compared to fuel factor revenues of $21.4 million for Q2 2021, mainly due to the over 50% increase in the average fuel cost. The average Fuel Cost Charge rate billed to consumers for Q2 2022 was $0.20 per kWh, compared to the average Fuel Cost Charge rate of $0.13 per kWh for Q2 2021.

CUC passes through all fuel costs to consumers on a two-month lag basis with no mark-up. CUC President and CEO Richard Hew said they were excited that the process to procure cleaner and lower priced renewable energy in large scale had begun as the significant increases in diesel fuel prices had been and would continue to affect customers’ bills.

“The Company has been proactive in its messaging to encourage customers to take the necessary steps to conserve energy and is collaborating with the OfReg and the Cayman Islands Government to find ways to mitigate the cost impact in the short term, particularly during the high consumption summer months,” he said.

CUC would be participating in the upcoming solicitation for utilityscale renewable energy to be conducted by the regulator. This is part of the Company’s activities under the Integrated Resource Plan that will transform the energy sector in Grand Cayman and ‘green’ CUC’s grid, they advised.

They had received approval from OfReg for a 20 MW battery which would assist the diesel generators with grid stability during loss of generation and also reduce fuel consumption. This project was under way, CUC said, and was anticipated to come online in late 2023.

CUC’s financial results for the second quarter 2022 reflected the ongoing economic recovery following the Covid-19 pandemic, they said.