Ms. Letitia Lawrence reports

CUC ANNOUNCES SECOND QUARTER RESULTS FOR THE PERIOD ENDED JUNE 30, 2014

Caribbean Utilities Co. Ltd. has released its unaudited results for the second quarter ended June 30, 2014 (all figures in U.S. dollars).

Net earnings for the three months ended June 30, 2014, totalled $5.7-million, comparable with the net earnings for the three months ended June 30, 2013. Higher electricity sales revenues in the second quarter 2014 were offset primarily by higher consumer service and maintenance costs.

After the adjustment for dividends on the preference shares of the company, earnings on Class A ordinary shares for the second quarter 2014 were $5.6-million, or 20 cents per Class A ordinary share, comparable with earnings on Class A ordinary shares and earnings per Class A ordinary share for the second quarter 2013.

Net earnings for the six months ended June 30, 2014, totalled $9.2-million, an increase of $600,000 when compared with $8.6-million for the six months ended June 30, 2013. This increase was due primarily to higher electricity sales revenues and lower depreciation costs. These items were partially offset by higher consumer service and finance charges.

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, 2014, were $9.0-million, or 31 cents per Class A ordinary share, an increase of $600,000 from the $8.4-million, or 29 cents per Class A ordinary share for the six months ended June 30, 2013.

Sales for the second quarter 2014 totalled 144.5 million kilowatt hours, an increase of 200,000 kilowatt hours when compared with 144.3 million kilowatt hours for the second quarter 2013. Sales for the six months ended June 30, 2014, totalled 275.2 million kilowatt hours, an increase of 5.5 million kilowatt hours in comparison with 269.7 million kilowatt hours for the six months ended June 30, 2013. Sales for the second quarter 2014 and the six months ended June 30, 2014, were positively impacted by warmer weather conditions and an increased number of customers when compared with the same periods last year.

President and chief executive officer, Richard Hew, said, "The company continues to position itself to meet the current and future energy needs of Grand Cayman by making the necessary investment in infrastructure while remaining focused on controlling our operating expenditures and providing our customers with a safe and reliable electricity service."

Capital expenditures totalled $7.5-million, and the company's reliability of service as measured by the average service availability index was recorded at 99.96 per cent for the second quarter 2014.

In June, 2014, following review and approval by the Electricity Regulatory Authority, the company increased its base rates by 1.5 per cent as allowed under the rate cap and adjustment mechanism. During the period under review, an independent, comprehensive, allocated cost of service survey was also completed and submitted to the ERA for review. As a result of the COSS, the company adjusted its base rates for a 1-per-cent reduction to the residential customer category, a 2.8-per-cent increase to the general commercial customer category and a 1.1-per-cent increase to the large commercial customer category. Altogether, these adjustments equate to the 1.5-per-cent RCAM base-rate increase.

The ERA cancelled the previous solicitation process for firm generation in July, 2013. This process had been initiated by a certificate of need issued by the company in November, 2011. The CON was driven primarily by the coming retirement of some of the company's generating units due to begin this year.

Following the issuance of a new CON in October, 2013, the ERA has since restarted the process, and bids were submitted by qualified bidders, including the company, in May, 2014. A decision is expected imminently as the time given by the ERA for the announcement of the winning bidder was late July.

During the second quarter 2014, the company secured the supply of 7.5 megawatts of temporary mobile generation following the retirement of 17.5 megawatts of generation. This temporary generation will complement existing generation and help to ensure continuity of supply until the installation of the firm capacity.

During the period under review, the company embarked on a number of initiatives, which will continue to enhance the level of service it provides to its customers by offering additional off-site bill payment locations with convenient opening hours and by improving its pay-by-telephone service. More resources were also added to the company's customer contact centre to improve e-mail and telephone inquiry response times.

The advanced metering infrastructure project is slated for substantial completion by the end of 2014. To date, over 8,000 customers have the AMI meters, which will assist them with regularly managing their energy usage. The project will provide real-time consumption information and bring efficiencies to meter reading, as well as other services. AMI will also enable a pay-as-you-go payment option, which will help customers to monitor and control their electricity consumption.

The second quarter management's discussion and analysis can be accessed at the company's website (investor relations/press releases) and at SEDAR.

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