JPS Co building on Knutsford Boulevard taken on Saturday 8.7.2006

Marubeni-owned Jamaica Public Service Company Limited (JPS), with a $32.7 billion fuel bill dragging on revenues, has reported a total wipe-out of the near $2 billion of profits made in 2006 and a descent into losses of $306 million at financial year end December 31, 2007.

Had it not been for more than half a billion in tax credits, the power utility would have chalked up losses of more than $808 million, the largest portion of which, $714.6 million, was recorded in the fourth quarter and linked in part to hurricane recovery charges.

The monopoly company's fuel purchases to power the national grid - which in turn has sent household and company electricity bills soaring - were $6 billion higher last year as world oil prices soared, and accounted for more than 60 per cent of the $54.2 billion of revenues that flowed to JPS.

In 2006, fuel expenses repre-sented 55 per cent of revenues.

The higher fuel bill in 2007 was by itself enough to erase the $5 billion of improved revenue collections and drag down the company's gross profits by a near $600 million to $16.3 billion. But JPS also had noticeably heavier operating expenses, which rose by $1.8 billion to $9.7 billion.

$5b maintenance bill

Included was a $5 billion maintenance bill (2006: $4.5 billion), which is likely to climb in the year ahead, given the ongoing review of the system prompted by public condemnation of the company after a trip on a line in Kingston plunged the country into darkness for several hours in January.

The result of the higher spend was a 22 per cent depressed EBITDA of $6.55 billion; and a $2.3 billion erasure of operating profit or EBIT, which plummeted 40 per cent from $5.5 billion to just under $3.3 billion. On the balance sheet, higher receivables or short-term collections, which rose by almost $4 billion to $14.4 billion, and a near doubling to $10.3 billion of payables or monies due to creditors, left the company with depleted working capital of $6.7 billion, down from $8.8 billion.

The company's liabilities also grew to about $37 billion at December - $24.6 billion of which were long-term debts, including $15 billion of loans and near $2.36 billion of customer deposits.

At the end of the period, JPS's balance sheet was heavier at $53.3 billion, a net gain of $2.5 billion due largely to improved valuation of its fixed assets, up from $40.3 billion to $44.7 billion.

business@gleanerjm.com

December 31, 2007

Revenues	$54.3b
EBIT	$3.3b
Net Loss	($306.1m)
Net assets	$53.3b
Current ratio	1.55x
Equity	$28.7b