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JPS fuel bill doubles, profit grows 693%

Published:Friday | May 21, 2010 | 12:00 AM

Electricity consumers paid an approximately J$12.5-billion energy bill for fuel used by provider Jamaica Public Service Company (JPS) to power its grid between January and March this year.

The utility bills its fuel charges as a pass-through cost to customers. The current charges came close to doubling the March 2009 quarter's J$6.8 billion, tracking with the near doubling of world oil market prices within that 12-month period.

World oil is now trading at around US$70 per barrel, trending down from April's US$85 high, but Jamaica buys on concessionary terms from Venezuela.

For the quarter, JPS, which is majority owned by Asian corporations Marubeni and TAQA, collected just shy of J$20 billion in revenue from which it grossed J$5.9 billion after fuel expenses and payments to its contracted independent power suppliers.

Higher maintenance charges, however, pushed operating expenses five per cent higher to J$2.95 billion, from J$2.8 billion in the comparative quarter, erasing the J$207 million of gains on gross profit.

The surplus from operations, net of larger depreciation expenses, was close to flat at J$1.96 billion. (JPS publishes its earnings in US dollars, which have been converted at a rate of JMD 89.51 for this year's results, and JMD 88.82 for the 2009 quarter).

Bottom-line profit outperformed the comparative quarter, swinging from a loss of J$142 million to net profit of J$840.7 million - a 693 per cent turnaround.

The company is now valued at about J$68 billion by assets but a substantial J$17 billion of that is in the form of receivables or funds owed by debtors.

JPS Q1 Results

Jan-Mar 2010

RevenueUS$223.2mFuel BillUS$139.9mGross ProfitUS$66.02mEBITUS$21.86mNet ProfitUS$9.39mAssetsUS$757.6mWorking CapitalUS$104.9mNet CashUS$25.55m