Ms. Letitia Lawrence reports

CUC ANNOUNCES UNAUDITED FIRST QUARTER RESULTS FOR THE PERIOD ENDED MARCH 31, 2015

Caribbean Utilities Co. Ltd. has released its unaudited results for the first quarter ended March 31, 2015 (all figures are in U.S. dollars).

Net earnings for the three months ended March 31, 2015, totalled $3.3-million, a decrease of $100,000 when compared with net earnings of $3.4-million for the three months ended March 31, 2014. This decrease was due mainly to higher depreciation and transmission and distribution costs. These items were partially offset by lower consumer services costs and higher other income. After the adjustment for dividends on the preference shares of the company, earnings on Class A ordinary shares for the first quarter 2015 were $3.2-million, or 11 cents per Class A ordinary share, compared with earnings on Class A ordinary shares of $3.3-million or 11 cents per Class A ordinary share for the first quarter 2014.

Sales for the first quarter 2015 totalled 129.0 million kilowatt hours, a decrease of 1.7 million kilowatt hours in comparison with 130.7 million kilowatt hours for the first quarter 2014. The average monthly temperature for the first quarter 2015 was 79.5 F as compared with average monthly temperature of 80.0 F for first quarter 2014. Cooler temperatures reduce air conditioning load, which can negatively impact the company's sales.

During the first quarter 2015, there was an increase in the number of customers connected to the Caribbean Utilities grid. The total number of customers as at March 31, 2015, was 27,873, an increase of 435 customers, or 2 per cent, compared with 27,438 customers as at March 31, 2014.

President and chief executive officer Richard Hew stated: "The Cayman Islands economy continues to show positive signs of growth with tourism air arrivals increasing 5.7 per cent during the first quarter 2015 over the same period last year and gross domestic product growth for 2015 projected at 2 per cent. There were also a number of positive developments recorded by the company during the period under review. Most significantly, on March 5, 2015, the groundbreaking event took place to commence the installation of two new 18.5-megawatt V48/60 medium-speed diesel generating units and one 2.7-megawatt waste heat recovery steam turbine."

When completed next summer, this additional firm capacity will replace some of the company's retiring generating units and allow Caribbean Utilities to continue to provide customers with cost-effective, safe and reliable electricity service. The new plant will be one of the most efficient in the region and is anticipated to improve Caribbean Utilities's current fuel efficiency by approximately 6 per cent. The approximate cost of the generation expansion project is $85-million.

On May 4, 2015, the company announced that it had completed its previously announced rights offering, which had commenced in March, 2015. Under the offering and related standby agreement, Caribbean Utilities raised gross proceeds of $31,563,639 through the issue of 2,930,700 Class A ordinary shares at a price of $10.77 per Class A ordinary share. After giving effect to the offering, Caribbean Utilities has an aggregate of 32,237,709 Class A ordinary shares outstanding. Fortis Energy (Bermuda) Ltd., an existing shareholder of Caribbean Utilities, purchased an aggregate of 2,169,682 Class A ordinary shares under the offering and a standby agreement with the company. FEBL now holds 19,460,326 Class A ordinary shares, representing approximately 60.4 per cent of the outstanding Class A ordinary shares of Caribbean Utilities, which percentage holding increased approximately 1.5 per cent as a result of the offering. FEBL is a wholly owned subsidiary of Fortis Inc. of St. John's, Nfld., Canada. The company intends to use the proceeds of the offering to partially finance the generation expansion project and for other continuing capital expenditures.

Customers saw a reduction in their bills during the first quarter 2015, reflecting the fact that the company's average price per imperial gallon of fuel for the first quarter 2015 decreased 32 per cent to $3.24, compared with $4.75 for the first quarter 2014. This reduction is the result of declining market prices, which began in late 2014, as well as the Cayman Islands government's reduction of import duty, which went into effect on Jan. 1, 2015. The fuel factor mechanism passes 100 per cent of the fuel costs through to customers who are now receiving the full benefit of these reductions.

During the first quarter 2015, the company and the Electricity Regulatory Authority agreed on revisions to the feed-in tariffs program, which now allows for four megawatts of consumer-owned renewable energy generation. These changes went into effect on April 1, 2015.

Mr. Hew added: "We are very pleased with the uptake for CORE, which currently has a subscribed capacity of approximately 2.6 megawatts. We believe the program, along with the five-megawatt solar project proposed by the company and currently under review by the ERA, will provide environmental benefits without negatively impacting cost and reliability of service on our small island grid."

The company believes that reliability of service is critical to the island's continued growth and development. Therefore, the company continues to focus on investing to maintain or improving the level of service offered to customers. Reliability of service as measured by the average service availability index was 99.95 per cent for the first quarter 2015, and capital expenditures for the first quarter 2015 were $7.1-million.

Caribbean Utilities' first quarter results and related management's discussion and analysis for the period ended March 31, 2015, can be accessed on SEDAR.

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