Emera predicts up to $8 mil. earnings drop

Emera predicts up to $8 mil. earnings drop
Grand Bahama Power Company

NASSAU, BAHAMAS — The Grand Bahama Power Company’s (GBPC) Canadian owner Emera believes that the impact of COVID-19 on the utility will be partially offset by recovery of load following Hurricane Dorian, while noting that the decrease in earnings from its Caribbean utilities is expected to be between $3-$8 million depending on the duration of the pandemic’s impact.

The energy giant in its management discussion and analysis on the company’s first quarter results noted earnings from the Caribbean utilities are expected to be lower due to the impact of COVID-19 on local economies. “Tourism and associated support businesses have been significantly impacted by the suspension of international travel, with many businesses temporarily closed,” the company said.

It further noted, “GBPC’s earnings are expected to be consistent with 2019 earnings which were lower than normal as a result of Hurricane Dorian. The impact of COVID-19 on GBPC is expected to be partially offset by recovery of load following Hurricane Dorian. The decrease in earnings from the Caribbean utilities is expected to be in the range of approximately $3 million to $8 million USD depending on the extent and duration of the pandemic’s impact on local economies.”

Back in January 2020, the Grand Bahama Port Authority (GBPA) approved the recovery of approximately $15 million US of restoration costs related to the Grand Bahama Power Company’s self-insured assets. “As of March 31, 2020, $13 million USD of these costs were incurred, and recorded as a regulatory asset. Recovery of the regulatory asset, due to start on April 1, 2020, has been temporarily suspended as a result of the economic impacts of COVID-19 on Grand Bahama,” Emera said.

The company also noted that on April 16, 2020, Standard and Poor’s lowered its long-term foreign and local currency ratings on The Bahamas. “The downgrade was driven by the uncertainty around the duration of the COVID-19 pandemic and the strength of the recovery. The downgrade is not currently expected to have a material financial impact on GBPC,” the company said.