MARUBENI Corporation’s 50 per cent divestment of its Caribbean power operations, including the Jamaica Public Service Company (JPS), cut by 76 per cent its power division’s operating profit to ¥4 billion (US$44.9 million) over nine months ending December 31, 2010.

The divestment cut the division’s volume trades by 41 per cent to ¥204 billion (US$2.3 billion) and gross trading profit declined by 45 per cent to ¥20 billion (US$224.7 million) when compared with the corresponding period in 2008.

Despite the fall in activity the division still earned 70 per cent more net income at ¥17.8 billion due to equity gains and increased activity of its other power entities worldwide, over the review period.

“…mainly because the Caribbean integrated power business was deconsolidated and treated as an affiliate at the end of the previous consolidated fiscal year. On the other hand, net income for the period grew by ¥7 billion year-on-year to ¥17.9 billion due to an increase in equity in earning of affiliated companies through overseas power business, in addition to capital gain and a gain on re-measurement of our remaining interest in an overseas power business in the first quarter,” stated Marubeni in its recently released financials.

In March 2009, Marubeni sold a 40 per cent stake in JPS to Abu Dhabi National Energy Company’s (TAQA) for US$320 million for 50 per cent of Marubeni Holding’s Caribbean power assets.

The deal grew TAQA’s power assets to 11,650 MW from 10,500 MW; and extends TAQA’s energy value chain to power transmission and distribution. TAQA is growing so fast that its Caribbean joint venture with Marubeni will aid it in tripling its size to US$60 billion in a few years. Its assets now stand at US$23 billion.

Marubeni originally bought US based Mirant Corporation’s Caribbean-based operations in April 2007 for US$1 billion including related debt of US$350 million, power purchase obligations of approximately US$153 million and estimated working capital at closing. The net proceeds to Mirant from the sale were some US$565 million after payment of transaction costs estimated to be approximately $14 million.

Mirant’s Caribbean business included controlling interests in Jamaica Public Service Company and Grand Bahama Power Company. Mirant also owned 39 per cent of PowerGen, the owner and operator of three power plants in Trinidad, 25 per cent of Curacao Utilities Company which provides electricity and other utility services and a US$40-million convertible preferred equity interest in Aqualectra, an integrated water and electric company in Curacao.