CARIBBEAN UTILITIES COMPANY, LTD. ANNOUNCES UNAUDITED RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025, AND STRATEGIC MILESTONES

Executive Summary

• Caribbean Utilities Company, Ltd. (CUC) reported unaudited financial results for the three and six months ended June 30, 2025, highlighting a $1.4 million increase in Q2 net earnings compared to the prior year period.
• The company announced a 3% increase in its quarterly dividend to $0.190 per Class A ordinary share, approved in May 2025.
• Strategic operational updates include a 7% boost in fuel efficiency in Q2, significant customer savings, and a regulatory agreement with the Utility Regulation and Competition Office (URCO) to withdraw an old Certificate of Need (CON) and submit a new one by September 5, 2025, to address future generation capacity and renewable integration.

Key Details

• Q2 2025 Financial Performance:
  • Net earnings: $11.5 million ($0.27 per Class A ordinary share), an increase of $1.4 million from $10.1 million ($0.26 per share) in Q2 2024.
  • After adjustment for preference share dividends, earnings on Class A Ordinary Shares were $11.3 million ($0.27 per share) in Q2 2025, compared to $10.0 million ($0.26 per share) in Q2 2024.
  • Electricity sales revenues increased by $1.3 million to $32.6 million in Q2 2025 (from $31.3 million in Q2 2024).
  • Drivers for earnings growth included higher operating income from 1% kWh sales growth, base rate increases of 4% (effective June 1, 2025) and 3.2% (effective June 1, 2024), Z-Factor revenues, and decreased power generation/maintenance costs.
  • Offsets included increased depreciation, transmission and distribution costs, and general and administrative expenses.
• Operational Metrics & Customer Impact:
  • Q2 2025 saw a 1% (2.5 million kWh) increase in electricity sales compared to Q2 2024.
  • Customer base grew by 2% in Q2 2025 compared to Q2 2024.
  • Capital expenditures totaled $24.6 million during Q2 2025, comparable to Q2 2024.
  • Strategic system upgrades in Q2 cut thermal spinning reserve needs and boosted fuel efficiency by 7%, resulting in an estimated $2 million in fuel cost savings passed to customers.
  • Fuel factor rates on Grand Cayman remained below 18 cents per kWh year-to-date.
• Dividend Information:
  • Approved a 3% increase in the quarterly dividend from $0.185 to $0.190 per Class A ordinary share in May 2025.
• Regulatory & Strategic Milestones:
  • Moody’s Rating: In June 2025, Moody’s reaffirmed the Cayman Islands' Aa3 bond rating with a stable outlook.
  • DPV RFP: In July 2025, URCO released a Request for Proposal (RFP) for 22.5 MW of Dispatchable Photovoltaic (DPV) power. CUC plans to participate in this initiative.
  • Certificate of Need (CON) Update: On August 1, 2025, CUC and URCO agreed to address anticipated generating capacity requirements. CUC voluntarily withdrew its CON submitted on June 7, 2024, and URCO rescinded its Final Determination from April 24, 2025.
  • New CON Submission: CUC will submit a new CON to URCO by September 5, 2025, defining generation resource requirements for energy demand from 2027 onward.
  • Regulatory Clarification: Both parties acknowledged that Condition 31 of CUC's T&D Licence does not preclude firm capacity generation from renewable sources, and hybrid solar PV systems with battery storage may qualify as firm capacity subject to Effective Load Carrying Capacity (ELCC) analysis.
  • License Modernization: Discussions are ongoing to modernize the T&D Licence to align with evolving regulatory and operational needs.

Notable Quotes

• "CUC continues to deliver investments that are making a significant impact for our customers. The realized overall annual cost savings for our customers through fuel cost savings via efficiency measures and price reductions demonstrate our commitment to investing in projects that are driving affordability for our customers," said President and CEO, Mr. Richard Hew.