Camilo Thame, Business Reporter

The Jamaica Public Service (JPS), the light and power company, reported a 26 per cent increase in net profit in the quarter to June 30, its after-tax earning moving from $472 million for the corresponding period last year to $593 million.

The profit growth was driven largely by a 21 per cent increase in revenue during the quarter, with operating income reaching $12.4 billion, against the $10.2 billion for the quarter to June 30, 2005.

This translated into gross profit of $4.2 billion - a 28 per cent increase over the corresponding period in 2005 - despite an 18 per cent increase in fuel costs and a 19 per cent increase in independent power provider (IPP) costs.

Fuel costs

Fuel costs, which amounted to $6.99 billion during the period, up from $5.92 billion for the three months ended June 30, 2005, were almost entirely passed through to consumers.

IPP costs, which are based on fixed-power purchase rates negotiated between JPS and private power-generation firms, were also passed directly to consumers. The increase, in this instance, was due to more electricity being provided to the grid by Jamaica Energy Partners (JEP), which contributed an additional 49 MW of generating capacity, increasing its contribution to the grid to 123 MW.

Generating capacity

Prior to this JEP addition, the total generating capacity provided by private firms to the grid was 175 MW. The additional capacity by Jamaica Energy Partners increased the total IPP supply to JPS by 28 per cent.

JPSCo refinanced $11.2 billion (US$170 million) of its long-term loans of which $9.3 billion (US$141.6 million) was reflected as current maturities as at June 30, 2006.

"These loans," the company said, "were refinanced on more favourable terms in relation to both the interest rate and tenure." This should positively impact the utility's finance cost which was $606 million during the quarter, a 28 per cent increase over the net financing cost for the comparative quarter last year.