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Obiglio takes charge of JPS finances

Published:Wednesday | March 31, 2010 | 12:00 AM
Gary Osbourne ... final day on the job.
Damian Obiglio, president and CEO, JPS. - File photos
Corporate headquarters of Jamaica Public Service Company Limited, Knutsford Boulevard, New Kingston.

Damian Obiglio, president and chief executive officer of Jamaica Public Service Company Limited, has taken charge of the utility's financial unit 'in the short term' following a restructuring by its parent company that resulted, for Jamaica, in the departure of Chief Financial Officer Gary Osbourne.

Osbourne leaves the company today, March 31, days after the company reported a near six-fold growth in net profit to US$42.2 million (J$3.78 billion) in 2009. Its shareholders got a US$25.5 million (J$2.28 billion) payday in dividend distribution as a result.

JPS, which has some four classes of preference shares listed on the Jamaica Stock Exchange, is owned 40 per cent by Marubeni, 40 per cent by TAQA, 19 per cent by Government, held between the Accountant General and Development Bank of Jamaica, while the other one per cent is held by an individual.

Reduce the staff

Marubeni TAQA Caribbean (MTC), the controlling company, has decided to significantly reduce the staff complement at its head office in Atlanta after an internal review that a stock market filing by JPS said extended to expatriates assigned to the Caribbean business units.

JPS's current earnings report for 2009 indicates a shift in performance levels for the company, which just a year before was alternating between losses and gains per quarterly period - ending the year at US$7 million in the black, or the equivalent of J$577 million.

Revenue underperformed 2008, however, by just under US$195 million, the net effect of the US$199.9 million decline in the company's fuel bill from US$655.8 million to US$465.9 million.

JPS says fuel is treated as a recovery cost billed to customers, off which it makes no gains.

The savings in the 2009 period were strongest on the operational side, where the company eviscerated US$20 million from its administrative and selling costs, and another US$11 million from its maintenance/repair bill, cutting the two down to a combined US$160 million.

"On the operating side, we judiciously prioritised operating and maintenance expenses, resulting in reduced costs; and benefited from greater efficiencies, particularly in the use of fuel in electricity generation," JPS Head of Corporate Communication, Winsome Callum told Wednesday Business on Monday.

It would have helped that the company had no big storms to clean up after in the last year.

JPS pins the reduction on the admin side to cost containment measures, including an electricity theft reduction programme.

Losses reduced

System losses were also reduced by about one per cent during the year, the company said.

"After the recorded losses in 2007 and the modest performance in 2008, we are reassured by the 2009 results," said Obiglio.

"It is very encouraging that, despite the challenges of 2009, we were still able to report reasonable results."

JPS is now in a better position, he adds, to attract investments and negotiate loans to finance capital expansion programme.

"This is particularly critical now, as we are about to embark on a number of new generation expansion initiatives," the JPS president said.

The company is investing US$225 million over five years in projects to add capacity and improve the grid.

In the last three years, the company says it has pumped back an average of US$50 million into its operations each year, primarily, said Obiglio, "to improve our transmission and distribution infrastructure, and for generation expansion and reliability improvement projects."