Jamaica Public Service Company profit got a shock for the June quarter when a 21 percent increase in finance cost drove total cost for the quarter in this area to US$18 million from US$15 million in 2013.
For the six months to June, finance cost was flat with the prior year at nearly US$33 million for each period. The company, the sole distributor of power to end users in the country, reported only US$1.7 million in after tax profit for the quarter and US$8.9 for the six months to June. In 2013 the second quarter profit was US$1.6 million and the six months US$2.4 million.
Revenues generated in the periods to produce those results are US$270 million versus $268 million in 2013 for the quarter and US$533 million in the six months and for 2013, US$539 million. Although the revenues varied, a more important measure is gross profit which are net of the impact of fuel and the charge for the purchase of power from private power plants. The sales net of fuel and the purchases of power came out at US$67.2 million in the June quarter compared with US$62.9 million in 2013 and US$137 million for the six months and US$133.5 in 2013. The return on equity is only around 5.4 percent for the year well below the allowed rate of 16 percent by the regulators, but the impact of devaluation charge due to the accounting in US dollar rather than Jamaican dollars negatively affected the returns.
Ironically, while JPS records its financials in United Sates dollars, the company suffered a devaluation loss of US$7.4 million in the quarter and US$12.5 million for the six months. Without the foreign exchange losses return on equity would have been much greater than the above stated figure.
“JPS currently has approximately 606,654 customers who are served by a workforce of approximately 1,690 employees. The Company owns and operates: 4 power stations, 9 hydroelectric plants, 43 substations and approximately 14,000 kilometres of distribution and transmission lines,” the company stated in its annual report for 2013.
JPS That has equity of US$337 million also has debt of US$418 million as of March.
Finance cost shocks JPS
August 4, 2014 by
[…] Jamaica Public Service Company has a series of preference shares listed on the Jamaica Stock Exchange. The company announced a dividend for one of its recent listings, a US dollar based preference share. The company, the sole distributor of power through the national grid, approved a dividend payment of the Class F9.5% Preference Share of US$0.236849313 per share to be paid on October 31, to shareholders on record as at October 29, 2014. Jamaica Public Service Company previously paid a dividend for these preference share amounting to a total of US$1,137,652.66 or 0.463287757 on August 15, 2014. […]