CUC earnings take $4M hit from COVID-19

| 03/08/2020 | 47 Comments
Cayman News Service
CUC generator

(CNS): Caribbean Utility Company’s earnings fell by $4.2 million during the first six months of this year when compared to 2019, as a result of the COVID-19 pandemic. Although there was significant increase in power consumed by residential customers, the closure of large commercial customers led to a major fall in sales.

In addition to the impact of the COVID-19 lockdown on CUC’s operating income, net earnings were negatively impacted by higher finance charges driven by higher long-term debt, the company said in the latest unaudited accounts.

During the second quarter of the year, which covered the major lockdown months, operating decreased by $2.6 million when compared to the same three months in 2019. However, despite the drop in consumption after the larger commercial customers shut down, the actual number of customers grew when compared to last year.

Even though thousands of residents left the islands over the last four months, the number of customers increased by 2%. At the end of June 2020 CUC’s clients base comprised 30,704 households and businesses, an increase of 604 compared to the end of June 2019.

“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,” said Richard Hew, the president of CUC.

“Throughout the period CUC continued to deliver safe and reliable electricity service to its customers, even to those who experienced difficulties paying their bills,” he added, as he thanked CUC staff, public service officials and local vendors for their assistance and work during the crisis period.

See CUC’s full financial report here

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Category: Business, utilities

Comments (47)

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  1. Anonymous says:

    Key wording is that the earnings fell. They went from sh*t tons to a little less than usual. Boo hoo!

  2. Anonymous says:

    Whenever CUC is mentioned in an article it always brings out the numpties who can’t figure out the price/kWh and assume that because they use a lot that it’s a rip off.

  3. Anonymous says:

    Oh boo freakin hoo, somehow don’t feel bad for them at all.

    • Anonymous says:

      Please keep in mind that a significant amount of Caymanians and employees of CUC invest in CUC. Caymanians are also the leaders in management of CUC. They are some of our brightest and most talented. I’m proud of them. We wish them well through this storm.

  4. V says:

    Covid fee surcharge incoming.

  5. Anonymous says:

    My heart bleeds 😢

  6. Anonymous says:

    CUC’s normal earnings are 8.4 million dollars per year. How much of that goes to management? Asking for a friend.

  7. Anonymous says:

    CUC will be entitled to government funds to offset their “losses”.
    Just ask Ofreg, they will tell you.

  8. Anonymous says:

    Richard Hew will guide CUC through this storm and they we be great again soon!

  9. Anonymous says:

    That’s strange, I didn’t see my bill go down at all, even though fuel is 1/3 of the price.

    • Anonymous says:

      I didn’t see my bill go down at all, but considering I was running the a/c almost non-stop (instead of turning it up to 80 degrees when we left for work and when we go out on weekends) there was obviously some kind of reduction in rates somewhere.

  10. Anonymous says:

    As long as it doesn’t affect my dividends.

    • Anonymous says:

      Of course it will affect your dividends for 2020. What are you thinking?

    • Anonymous says:

      Agreed. As long as it doesn’t affect my investment then I am ok with it. Power consumption will pick up again right along with the price of fuel so that theoretically should cause the price per KW to rise in direct relation. But again I hope that they don’t use this as an excuse to cut or suspend the dividend.

  11. Anonymous says:

    This tells me that commercial buildings need to put more effort into energy-saving measures and that will reduce their overall bills. If people each in their own home use less energy than people in a group at work, then there are energy inefficiencies. I have to wear long pants and a sweater in the office because it is so cold, but at home I am wearing a regular top and skirt. Businesses can save money by reducing their energy consumption.

    • Anonymous says:

      You are correct. However cuc has also instituted demand billing for large commercial customers. A large part of the bill (the largest actually) is based on the building’s 24 month peak demand usage. This is largely done under the premise of offsetting cucs capital requirements for larger equipment. But is also makes large solar completely unviable and insulates them during times like these. That program was rolled out to be “revenue neutral” and because they did some bad math and building managers reduced their energy CUC went crying to OfReg that they needed a rate hike and got it no questions asked and it was astronomical. A very poorly regulated virtual monopoly gets their money no matter what…

  12. Anonymous says:

    There is nothing to see here. CUC will be back in to form in no time.

  13. Anonymous says:

    Let’s see if they ask for a rate increase

  14. Anonymous says:

    Oh – this is the first that they haven’t reported “record earnings” – they should have enough cash reserves to handle any shortfalls for quite some time according to their previous boasting

  15. Anonymous says:

    Holding my hand out waiting for a f@$k to land on it so I could give it.

  16. Anonymous says:

    Trying to care but my care cup for CUC is empty.

  17. Anonymous says:

    They have lost nothing. Government props them up.

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