On Wednesday, BEL held its Annual General Meeting to report to its shareholders on the Company's performance in 2021. The Company says that it leaned on its strong financial position from 2020 to absorb a reduction of 3.4% in electricity rates. Also, energy sales rebounded by 4% with the gradual reopening of the economy.
But the Cost of Power - driven by the cost of gas - kept going up, increasing from 51% in 2020 to 58% in 2021. And that's why BEL wants to increase in-country generation, which should reduce vulnerability to fuel and other price fluctuations.
But despite the increase in the Cost of Power, BEL's net income for last year was 34 million dollars, which is the third-highest in the Company's history.
This morning, we spoke with the Chairman of BEL's Board of Directors about the finer details of the utility's performance last year:
E. Andrew Marshalleck, SC - Chairman, BEL Board of Directors
"Well, the AGM dealt with the performance in 2021, and that performance was decent. It was good. BEL was able to realize decent profits, notwithstanding the reduction in rates, and to absorb the increases in the cost of power that were really not factored in or covered by the rates, the allowable rates during that period. But that situation continues where you have an increase in the cost of power on the approved rates are not covering those costs. So, BEL must find ways to absorb the difference. The dividend declared was the same as the year before, $0.20 per share."
Daniel Ortiz
"In terms of the performance of the investments that the shareholders are making, what do you make of the value they're getting at this current moment?"
E. Andrew Marshalleck, SC
"The average return on investments on shares in Bell is still very low. We've had a couple of good years, but taken together, they're not enough to correct what were poor returns in previous years."
Daniel Ortiz
"Explain what you mean by poor returns in previous years."
E. Andrew Marshalleck, SC
"Well, we would expect a return. I don't have the exact figure before me. I think the law allows for a return on investment of - I think it was reduced to 8. It's supposed to be 10%. Well, the actual return realized over the years the average going back, I think it's more in in the neighborhood of five - 6%."
As you heard in the interview, BEL's Board of Directors declared a dividend of 20 cents per ordinary share: a total of $13.8 million dollars. The Government of Belize, the Social Security Board, and over 1,500 Belizean citizens and corporations together hold an ownership stake of 66.7% of the company's ordinary shareholdings.
