COVID Dims DOMLEC
Dominica's only electricity utility company reports after tax profits of EC$14,218
As the Government of Dominica signals its intention to become, again, the majority shareholder in the Dominica Electricity Services Ltd. (DOMLEC), the company reports slight growth in 2020 due mainly to the impact of the Covid -19 pandemic.
"The beginning of 2021 brought with it a renewed drive to progress towards the realization of the company's pre-Maria revenue levels. However, the declaration of the Covid-19 pandemic and its attendant repercussions stymied our efforts in that regard," said David McGregor, DOMLEC's board chairman in the Chairman's Report of the 2020 annual report. "Our move to the pre-Hurricane Maria customer count of 36, 499 continued with our attainment of 94.6% of that figure by the end of 2020".
The theme of the report is: "Remaining Constant During Wavering Times".
McGregor reports that DOMLEC recorded a post-tax profit of EC$14,218.
"Total revenue of EC$80.38 million in 2020 is 5.8% lower than that of 2019. Total operating expenses equal EC$75.06 million or a decrease of 6.15% over the 2019 figure. Net profit before tax for the year ended December 31, 2020, was EC$2.42 million compared to EC$2.24 million in 2019," wrote McGregor. "Deferred taxes applied in 2020 was EC$2.4million resulting in net prof1t after tax of EC$14,218 compared to a net prof1t after tax of EC$1.66million for the previous year."
McGregor added: "The company's performance in an extremely challenging year and its ability to keep the lights on for its customers are due to a committed and competent human resource base guided by the Board of Directors".
But DOMLEC is still feeling the effects of Hurricane Maria which devastated Dominica's infrastructure in September 2017.
"Generating capacity has not returned to the pre-Maria level as the Padu Power Plant remains out of commission due to unforeseen delays. The 1.5MW Wartsila Unit at Sugar Loaf has been a welcome addition since its commissioning in September 2020," said McGregor.
Nevertheless, there have been signs of growth in DOMLEC's portfolio, McGregor said.
Compared to 2019, there was growth in the domestic section of the company's base (8.1%); hotel (55%), and street lighting (142.7%). But there was negative growth in the commercial section (-2.2%) and industrial (-5.2%) sectors.
"Overall electricity sales increased by 5.2% over 2019 sales," writes McGregor.
DOMLEC is owned by Dominica Power Holding Limited, a subsidiary of Emera (Caribbean) Incorporated; it owns 52% of the ordinary share capital of DOMLEC; 21% is held by Dominica Social Security while 27% is held by the general public. DOMLEC's parent company is Emera Inc., an energy and services company registered in Canada.
Last week Prime Minister Roosevelt Skerrit indicated that the government is considering the purchase of majority shares in DOMLEC, Dominica's only electricity utility company.
Started in 1949 by the Colonial Development Corporation, the company, in 1976, was purchased by the government (49% of the shares) and in 1983 government acquired the remaining shares. In 1987, Government reduced its ownership interest in the Company by offering 60% of the shares to the general public and DOMLEC's employees.
On 23 March 1997, the Commonwealth Development Corporation (CDC) purchased 72.8% of the shares from the government thus making CDC the majority shareholder.
In May 2004 WRB Enterprises and Dominica Social Security in a collaborative effort purchased CDC's shares in DOMLEC. These companies bought 52.8% and 20% of the shares respectively.
In April 2013 Light and Power Holdings (a subsidiary of Emera Corporation) bought WRB Enterprises' shares and became the majority shareholder of the company.
If Prime Minister Skerrit follows through with his plans, the shares of DOMLEC may change hands again.