BL&P up $43m despite hard times
Barbados’ lone electric utility company has accumulated more than $43 million in profits despite reduced customer consumption and lower sales.
This 2013 performance by Barbados Light & Power Co. Ltd. (BL&P), which is a $3.4 million increase over the previous year, means that BL&P has accounted for the majority of the $55.8 million in net income its immediate parent Light & Power Holdings Ltd. (LPH) earned last year.
According to LPH’s 2013 annual report, released as it held its annual general meeting last Wednesday, BL&P’s profits “can be attributed to a decrease in depreciation expense by $3.7 million due to the application of lower depreciation rates arising from the completion of the Depreciation Study conducted in 2013; a decrease in operating expenses by $1 million; a reduction in basic revenue by $1.3 million; and an increase in finance income by $1 million”.
It said all of this took place in a difficult economic climate where business was down, noting that “the continued reduction in customer consumption was mainly the result of the economic conditions prevailing in Barbados coupled with the growth in the renewable sector”.
“These factors contributed to a reduction in electricity sales of 0.7 per cent. Although the total number of customers increased marginally by 918, total average usage declined by 1.3 per cent per customer. The decline in sales is reflected in reduced revenue of $1.3 million to $191.9 million in 2013 down from $193.2 million in 2012. This decline was seen mainly in the commercial sector,” the LPH said.
“The company also recorded less revenue from fuel in 2013 – $376.7 million as against $397.5 million. The company does not profit or lose on fuel, hence this revenue is offset by identical fuel costs reflected in operating expenses.
“In 2013 total fuel costs decreased by $21 million (five per cent) while the average fuel clause adjustment decreased from 43.84 cents in 2012 to 41.68 in 2013. This overall decrease is explained by a 0.3 per cent and five per cent decline in fuel usage and prices respectively.”
As for LPH’s own performance, its profits last year were about $12 million more than 2012’s. Chairman Sarah MacDonald and managing director Peter Williams said last year “electricity sales declined or remained flat in the markets where LPH is invested.