BELIZE CITY, Thurs. Aug. 5, 2021– Last Thursday, the Belize Electricity Limited held its annual general meeting and released its 2020 Annual Report, which lists a $47.4-million-dollar net income for the company in 2020— a sizable increase in the utility company’s profits compared to the previous year, 2019.
These significant profits can primarily be attributed to a 36.85% decrease in the cost of power acquired from Independent Power Producers, primarily the Comision Federal De Electricidad (CEF) of Mexico.
In his report to the shareholders, titled “Powering Through Covid”, the chairman of BEL’s board of directors, Andrew Marshalleck, noted, “As commercial and industrial operations shuttered and shut down across the region in response to the pandemic, causing an overall contraction in the demand for power, the price of power provided by CFE fell dramatically and BEL was poised to and did take full advantage of the reduced prices.”
The company was able to retain its employees, whose salaries were also kept intact, while employees across the private and public sector in Belize saw their salaries slashed as part of drastic belt-tightening.
The reduction in the cost of power also allowed the company to show some leniency to its 104,000 customers, and as a result, since the start of the pandemic, none of these customers suffered a permanent electrical disconnection due to arrears on their accounts. This has caused the arrears of the company to increase by almost 20 million dollars from 25 million dollars to between 40 and 50 million dollars, said Marshalleck.
The company is now taking a “soft approach” to collecting the monies owed to BEL while maintaining its no-disconnection policy that was made possible due to the savings that resulted from a reduced cost of power — savings that hiked the profits on the company’s records, notwithstanding an 8.14% decrease in revenue caused by the pandemic.
According to the company’s 2020 annual report, the cost of power fell to 51% of its comprehensive revenue in 2020, whereas in 2019, the cost of power was 74% of the comprehensive revenue of the company.
The annual report indicated that the reduction in the cost of power was caused by lockdowns that took place locally and throughout the region, which, in turn, led to less overall demand for power. “Safety regulations obligated many businesses to close or operate under reduced business hours, resulting in an 18.3% decrease in commercial energy sales compared to 2019. Conversely, residential sales increased by 2.5% following from the closing of schools, curfew and quarantine regulations which saw customers spending more time at home,” BEL’s 2020 annual report explains.
The major shareholders of the company, namely the Government of Belize and the Social Security Board, as well as Fortis Cayman Inc. and the company’s 1500 small shareholders, are expected to receive higher returns this year as a result of BEL’s increased net income.