JPS pays higher dividend to owners on falling profit
Published:Wednesday | February 22, 2012 | 12:00 AM
Monopoly electricity distributor Jamaica Public Service Company (JPS) made US$34.2 million (J$2.96b) net profit last year, or 14.5 per cent less than the previous year, due to higher operating and finance costs, but still paid hefty returns to its owners.
The power company pumped more cash into new plant and equipment, and came close to doubling dividend payments to shareholders in a period when its receivables - which includes non-paying customers - grew fives times faster, or by US$47 million to US$277.8 million (J$24b).
JPS invested US$71.9 million (J$6b) in its operation and paid US$56 million (J$4.9b) in dividends, up from US$29.6 million in 2010.
These activities slashed its net cash by more than half, to US$9.76 million (J$842.9m) at yearend December 2011.
The majority Asian-owned company earned 22 per cent more revenues at US$1.15 billion (J$99.9b) due to higher fuel prices, which resulted in a five per cent increase in gross profit to US$307.3 million. In 2010, the utility made net profit of US$40 million (J$3.4b) off revenue of US$794 million (J$80.9b).
Fuel costs at US$766 million rose by one-third over year-earlier levels, based on oil price fluctuations which went to a high of US$112.97 a barrel in April, but ended the review period at US$98.83 or nearly 10 per cent higher than year earlier levels, according to New York Mercantile Exchange crude oil price data.
JPS recovers fuel charges from its customers.
The utility is owned by Japan's Marubeni Corporation, 40 per cent; South-Korea based Korea East West Power (EWP), 40 per cent; Government of Jamaica, 19.9 per cent; while 3,000 shareholders own the remaining 0.1 per cent of the shares.
EWP became a shareholder last April when it acquired the 40 per cent stake previously held by Abu Dhabi-based TAQA.