JPS nets $3.4b, pays out $2.4b in dividends
Local power provider, Jamaica Public Service (JPS) made US$40 million ($3.4 billion) in net profit for its full financial year ending December, which was five per cent lower than in 2009 due to electrifying maintenance and selling costs.
The results come at a time when its regulator, the Office of Utilities Regulation (OUR), is considering regulating the petroleum sector as a means of curtailing what the OUR called bloated oil charges that inflate consumer light bills..
“The OUR considers that there is a critical need to have focused oversight of the petroleum sector as the rates at which fuel is procured represents a direct pass-through to electricity consumers which, represents about 65 per cent to 70 per cent of the total charge for electricity. There is an overcharge in the current structure which must be corrected. To achieve this some tax regime correction and removal of CET would be required,” stated OUR in its business plan for 2011-2014, which did not state the origin of the overcharge.
Jamaicans paid US$578 million ($49.7 billion) on fuel in 2010 an increase of US$112 million ($9.6 billion) or 24 per cent year on year, according to JPS’s fuel costs which are absorbed by consumers.
A lot of its slower profit pace occurred in the final December-quarter down nearly a third to US$14.2 million compared with similar 2009 quarter, due to a rise in operational expenses that jumped fifty per cent to US$40 million in the quarter alone.
At the same time, JPS was able to pay a dividend of US$28 million to its shareholders.
The Government would have collected US$5.6 million ($481 million) for its 20 per cent stake.
Interestingly, its reduced annual profit wasn’t reflected in its bolstered cash and equivalents position up nearly fifty per cent to $23.4 million year on year.
JPS’s cashflow benefited from the rare appreciation of the Jamaican dollar against its US counterpart which resulted in JPS saving on its US denominated debt by US$8.9 million ($765 million), which was the complete reversal of the 2009 depreciation which added US$9.4 million ($808 million at today’s exchange rate) to its debt.
