LIGHT distributor Jamaica Public Service (JPS) has reported a 26 per cent jump in annual profit, increasing from US$24 million in 2017 to US$31 million for its financial year ending December 2018.

The increase in profit was supported by growth in JPS’ revenue stream which moved from US$836 million in 2017 to US$908 million in 2018.

The surge in profit reflected increases in fuel costs for seven months of JPS’ 2018 financial year. Finance income of the light and power company also more than doubled to US$11.1 million, boosting its bottom line results.

JPS also managed to contain its operating expenses which fell from US$225 million to US$202 million year-on-year led by lowered staff costs, repairs and maintenance and bad debt expenses.

Total assets of JPS also marginally grew to US$1.2 billion from $1.1 billion a year earlier, while liabilities increased to US$710 million from US$680 million.

Cash and cash equivalents of the light and power company also doubled to US$27 million from US$12 million in 2017. The performance left shareholders with earnings of 0.14 cents per share in the company.

Last month, JPS successfully raised US$180 million via two bond offers and syndicated loan towards refinancing one of the utility company’s existing debts.

The total bond offers, which opened on February 8 and closed on the 22nd, saw the light and power company raising J$10.68 billion and US$34 million in bonds; and US$66 million in syndicated loans. The debt offering was taken up by local banks, institutional investors and retail clients.

The refinanced debt by JPS will translate into significant savings per annum for the remaining three years of the utility company’s debt.

The offer replaces JPS’ previous debt which held an interest rate of 11 per cent (USD), to 7.35 per cent (USD) and 8.40 per cent (JMD).

JPS has embarked on a series of investments for greater fuel diversification and improving operating efficiencies, among them is a 190-megawatt (MW) power plant in Old Harbour Bay, St Catherine, set to be completed this year.

The new plant will operate on natural gas and will play a pivotal role in reducing Jamaica’s dependence on oil for electricity generation. The inclusion of natural gas in the fuel mix for power generation is expected to result in the stabilisation of fuel costs over the long term, while enhancing energy security and the integration of more renewables on the grid, JPS said.

“The improved technology will lower generation costs, as well as Jamaica’s exposure to the volatility of world oil prices. The natural gas plant will replace some of the generating units that operate on heavy fuel oil, resulting in much cleaner and more environmentally friendly energy,” the company shared.

— Karena Bennett