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CUC Announces Fourth Quarter And Twelve Month Results For The Period Ended December 31, 2012

Caribbean Utilities Company, Ltd. is listed for trading in United States dollars on the Toronto Stock Exchange.

GRAND CAYMAN, Cayman Islands, Feb. 7, 2013 /CNW/ - Caribbean Utilities Company, Ltd. (TSX: CUP.U) ("CUC" or "the Company") announced today its unaudited results for the Fourth Quarter ended December 31 st 2012 (all figures in United States dollars).

Net earnings for the three months ended December 31, 2012 ("Fourth Quarter 2012") were $4.1 million, a 20% or $1.0 million decrease when compared to $5.1 million for the three months ended December 31, 2011 ("Fourth Quarter 2011"). This decrease in earnings is the result of higher depreciation and transmission and distribution costs for the Fourth Quarter 2012 when compared to the Fourth Quarter 2011.

Net earnings for the twelve months ended December 31, 2012 were $17.7 million, representing a 13% or $2.7 million decrease from net earnings of $20.4 million for the twelve months ended December 31, 2011. This decrease in earnings was driven by a 1% decline in kilowatt-hour ("kWh") sales and higher depreciation, transmission and distribution, financing and general and administrative charges.

The temporary cessation of depreciation on two damaged generating units resulted in reduced costs for the twelve months ended December 31, 2011.  Depreciation expense recommenced on both units in 2012.Increased general and administration expenses for the twelve months ended December 31, 2012 were the result of higher costs associated with the Company's defined benefit plans.

These items were partially offset by lower maintenance costs for the twelve months ended December 31, 2012 as the Company continued its focus on efficiency and reliability capital upgrade projects. CUC's Average Service Availability Index, a key measure of system reliability, was recorded at 99.96% for 2012.

KWh sales for the Fourth Quarter 2012 were 132.4 million, comparable to 132.6 million for the Fourth Quarter 2011. KiloWatt-hour sales for the twelve months ended December 31, 2012 were 547.8 million kWh, a decrease of 6.2 million or 1% when compared to 554.0 million for the year ended December 31, 2011.  Sales were negatively impacted by cooler weather conditions which affected customer air conditioning usage.  The average temperature for 2012 was 81.9 degrees Fahrenheit compared to 82.3 degrees for 2011.

Electricity sales revenue increased $0.1 million, or 1%, in the Fourth Quarter 2012 to $16.8 million when compared to electricity sales revenues of $16.7 million for the Fourth Quarter 2011 due to the base rate increase of 0.7% which took effect in June 2012.  Electricity sales revenue decreased $0.5 million, in the twelve months ended December 31, 2012 to $69.1 million when compared to electricity sales revenues of $69.6 million for the twelve months ended December 31, 2011.  Electricity sales revenues for the year ended December 31, 2012 were primarily lower as a result of cooler, wetter weather conditions and continued weak economic conditions.

Higher fuel prices and higher fuel factor revenues drove operating revenues up by 2%, or $1.4 million, to $59.1 million for the Fourth Quarter 2012 from $57.7 million for the Fourth Quarter 2011.  Similarly, operating revenues increased 2%, or $5.5 million, to $223.5 million for the twelve months ended December 31, 2012 from $218.1 million for the twelve months ended December 31, 2011.  While fuel prices were stable during the twelve months ended December 31, 2012, they remain relatively high and as a result, customers continue to conserve their energy usage.

Total customers as at December 31, 2012 were 27,035, an increase of 1% compared to 26,636 customers as at December 31, 2011. The Company connected 141 customers for the three month period ended December 31, 2012 comprising 123 residential customers and 18 commercial customers.

After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the Fourth Quarter 2012 were $3.5 million, or $0.12 per Class A Ordinary Share, as compared to $4.5 million, or $0.15 per Class A Ordinary Share for the Fourth Quarter 2011.  After the adjustment for dividends on the preference shares of the Company, earnings on Class A Ordinary Shares for the twelve months ended December 31, 2012 were $16.8 million, or $0.58 per Class A Ordinary Share as compared to $19.5 million, or $0.68 per Class A Ordinary Share for the twelve months ended December 31, 2011.

Richard Hew, President and Chief Executive Officer of the Company stated, "The year 2012 was the third consecutive year without appreciable growth in electricity sales for CUC. Although there are some signs of weak economic growth reflected in the small increases in customer connections, any positive impact on sales is being offset by increased energy efficiency in new commercial buildings and by residential consumer conservation.  The Company continues to focus on controlling discretionary expenditures, while maintaining a safe, efficient and reliable service to customers. However, improvements in electricity sales and earnings continue to hinge on the return of growth in the local economy. "

Capital expenditures for the Fourth Quarter 2012 were $9.2 million, a $0.7 million, or 7% decrease from $9.9 million in capital expenditures for the Fourth Quarter 2011. Capital expenditures for the twelve months ended December 31, 2012 were $30.8 million, an $8.8 million, or 22% decrease from $39.6 million in capital expenditures for 2011.

Capital expenditures for 2011 included the repair of units damaged during that year for which the cost was covered by insurance proceeds (net of deductible). Excluding these costs, capital expenditure initiatives for 2011 totaled $34.0 million.

During the period under review the Company started the roll out of its Advanced Metering Infrastructure (AMI) project. This project will bring efficiencies in the meter reading and services such as disconnects and reconnects directly from CUC's offices, provide real-time electricity consumption information and a 'pay as you go' payment option to assist consumers with monitoring and controlling their electricity consumption.

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