JPS still creating value for Korean investor
Published:Wednesday | June 12, 2013 | 12:00 AM
Korea Electric Power Corporation (Kepco), which holds 40 per cent interest in the Jamaica Public Service Company (JPS) reported a 3.4 per cent increase in the book value of its investment in the utility to 303 billion won (US$267 million) in its March 2013 financials.
It indicates that JPS continues to provide value for its shareholders despite its March 2013 quarterly loss totalling some US$789,000, of which 40 per cent represented Kepco's share of the loss.
Kepco is a subsidiary of Korea East-West Power.
The rise in the book value was caused by a 17-billion won (US$15-million) increase in 'other comprehensive income' which represents certain gains not reflected in the profit and loss account. The financials posted to the US Securities and Exchange did not disclose the nature of the gains.
Kepco acquired JPS shares in 2011 for 301.9 billion won. Last financial year, the Korean company earned US$2 million in dividends from its JPS investment. The utility paid out a total of US$5 million in dividends last year.
For the three months ending March 2013, the company took no dividends, according to the financials.
The profitability of JPS, one of the largest companies in Jamaica, was affected by higher-than-usual finance costs at US$17 million for the quarter (US$11 million a year earlier) which nearly ate through the US$18 million of gross profit.
JPS's other top owners are Japan's Marubeni Corporation, at 40 per cent, and the Government of Jamaica, which holds 19.9 per cent.
The power utility currently earns US$1.14 billion (J$112b) of revenue annually as the monopoly distributor of electricity. It is capitalised at US$378.77 million (J$37.5b) while its net assets amount to US$838.46 million (J$83b).