Last checked at 23 Jul 2013 09:49
Jersey Electricity plc
Interim Management Statement
Jersey Electricity plc is today publishing an Interim Management Statement as required by the UK Listing Authority's Disclosure and Transparency rules, relating to the period from 1 April 2013 to the date of issue of this announcement.
In the quarter to 30 June 2013 unit sales in our Energy business were 3% higher than the same period last year due primarily to temperatures in April being lower than both last year and the long-term average. Unit sales for the month of July to date are marginally behind the level experienced in 2012.
In the nine month period to 30 June 2013, unit sales in our Energy business were 6% higher due to a combination of temperatures being consistently below the seasonal norm to date and the corresponding period last year being particularly mild. Electricity revenues were 14% higher than in 2012 due to the higher volumes of electricity sold and a year-on-year rise in tariff levels. As indicated in our half year results, this rise in revenues has not resulted in increased profitability, as might be reasonably expected, because our cost of sales rose due mainly to a higher use of oil for on-island generation than in the previous year.
Our power purchase requirements are materially hedged for the period 2013-16 and foreign exchange to a lesser extent out to 2015. We have also hedged a proportion of our estimated oil requirements for the winter period 2013/14.
The combined trading performance of our other business units was behind the corresponding period in the last financial year due mainly to the continued challenging trading conditions for our Retail business.
In December 2012, tenders were accepted for the project to build a new submarine cable (Normandie 3) to France. The total cost of the project is estimated at £70m with an expected commissioning date of 2015. The subsea cable is currently being manufactured by Prysmian in Italy and associated land cabling is being produced by them in France. Jersey land works have already started with the laying of ducts into which the new land cables will be laid. A substantial proportion of the project cost is denominated in Euro and forward contracts have been put in place to hedge this liability. In late May it was announced that Guernsey Electricity would also participate in this project and that the two companies would also share costs and capacity in the future potential Normandie 1 project, which will replace the subsea cable that failed last June 2012. Both these projects would result in Guernsey Electricity receiving around a quarter of the capacity by injecting a similar proportion of the investment required. It was also agreed that we will work closely to lay a possible second Jersey-Guernsey cable to enable increased power transfer and supply security between the islands.
Net debt at the end of June 2013 was £3m against a cash balance of £14m at the last financial year end but as indicated previously, Normandie 3 capital expenditure has moved the Company into a debt position. The incidencing of the capital expenditure is subject to change but a higher proportion of the outflows are expected in the next financial year. Our balance sheet remains in a healthy condition, and there have been no significant changes in the overall financial position of Jersey Electricity plc since we issued our Interim Report for the six month period ended 31 March 2013 other than those highlighted above.
The principal risks and uncertainties identified in our last Annual Report have not materially altered in the interim period.
23 July 2013
For further information, please contact:
Chris Ambler, Chief Executive Tel: 01534 505320
Martin Magee, Finance Director Tel: 01534 505201