EDMONTON, AB, May 1, 2024
/CNW/ - EPCOR Utilities Inc. (EPCOR) today filed its quarterly
results for the period ended March 31,
2024.
"First quarter financial performance was strong, with continued
growth in EPCOR's geographies and ongoing execution of the
company's commercial projects," said John
Elford, EPCOR President & CEO. "Progress continued on
the construction of two commercial water projects in Texas and we funded $120 million of our long-term investment in the
groundwater supply system."
"EPCOR's operations had solid reliability performance in the
first quarter, however our Alberta
customers were impacted by two unusual supply interruptions," said
Mr. Elford. "An electrical infrastructure failure at one of EPCOR's
Edmonton water treatment plants
led to water demand management measures being implemented for four
days. These measures restricted non-essential water use, while
maintaining essential water supplies throughout the event – and had
no impact on water quality. In addition, on January 13, 2024, all Alberta electricity users were impacted by a
shortage in power generation supplies, leading the Province to make
an emergency appeal for power conservation. Subsequently, on
April 5, 2024 another shortage in
power generation supplies led the Alberta Electric System Operator
to order power distribution utilities to implement rotating power
outages for about 30 minutes, in order to maintain the integrity of
the provincial electricity grid. These incidents underline the
importance of ongoing investment in utility systems and energy
supplies, in order to maintain and improve reliability for
customers."
"Today marks the release of EPCOR's 2023 Sustainability Report,"
added Mr. Elford. "This year begins a new three-year cycle for
sustainability target setting and performance reporting, informed
by our latest materiality assessment and the company's business
strategy. We've refreshed our Sustainability Scorecard to reflect
the progress we've made over the several years, and ensure we're
focused on achieving the governance, environmental, and social
performance that's needed for our long-term success. Reliability
and affordability remain important components of our Sustainability
Scorecard, and a focus for management across all our
utilities."
Highlights of EPCOR's financial performance are as follows:
- Net income was $104 million for
the three months ended March 31,
2024, compared with net income of $46
million for the comparative period in 2023. The increase of
$58 million for the three months
ended March 31, 2024 was primarily
due to fair value adjustments related to financial electricity
purchase contracts and higher Adjusted EBITDA1,
partially offset by higher income tax expense and lower
transmission system access service charge net collections.
- Adjusted EBITDA1 was $260
million for the three months ended March 31, 2024, compared with $244 million for the comparative period in 2023.
The increase of $16 million for the
three months ended March 31, 2024,
was primarily due to higher rates, higher consumption, and customer
growth, partially offset by higher operating costs and lower
construction activity.
- Capital expenditures were $190
million for the three months ended March 31, 2024, compared with $183 million for the corresponding period in
2023.
Interim management's discussion and analysis and the unaudited
condensed consolidated interim financial statements are available
on EPCOR's website (www.epcor.com) and SEDAR+
(www.sedarplus.ca).
1.
Adjusted EBITDA is a non-GAAP financial measure. See the
Non-GAAP Financial Measures section in Appendix 1 to this media
release.
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EPCOR builds, owns and operates electrical, natural gas and
water transmission and distribution networks, water and wastewater
treatment facilities, and sanitary and stormwater systems in
Canada and the United States. EPCOR also provides
electricity, natural gas and water products and services to
residential and commercial customers. EPCOR, headquartered in
Edmonton, is committed to
conducting its business and operations safely and responsibly.
Environmental stewardship, public health and community well-being
are at the heart of EPCOR's mission to provide clean water and
safe, reliable energy. EPCOR is one of Alberta's Top 80 Employers, is ranked among
Corporate Knights' 2023 Best 50 Corporate Citizens in Canada, and is designated a Utility of the
Future Today by the Water Environment Federation.
Appendix 1 Non-GAAP Financial Measures
EPCOR uses earnings before finance expenses, income tax recovery
(expense), depreciation and amortization, changes in the fair value
of derivative financial instruments, transmission system access
service charge net collections and other unusual items
(collectively, Adjusted EBITDA) to discuss operating results for
EPCOR's lines of business. Adjusted EBITDA is a non-GAAP financial
measure and is not a standardized financial measure under IFRS
Accounting Standards and might not be comparable to similar
financial measures disclosed by other issuers.
The reconciliation between Adjusted EBITDA to Net income as
reported under IFRS Accounting Standards is shown below:
(Unaudited, $
millions)
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|
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Three months ended
March 31,
|
2024
|
2023
(restated)1
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Adjusted EBITDA by
Segment
|
|
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Water Services
segment
|
$
106
|
$
92
|
Distribution and
Transmission segment
|
70
|
60
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Energy Services
segment
|
15
|
22
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North American
Commercial Services segment
|
24
|
26
|
U.S. Regulated Water
segment
|
37
|
34
|
Other
|
8
|
10
|
Adjusted
EBITDA
|
260
|
244
|
Finance
expenses
|
(50)
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(47)
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Income tax
expense
|
(9)
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8
|
Depreciation and
amortization
|
(103)
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(100)
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Change in fair value of
financial electricity purchase contracts2
|
7
|
(71)
|
Transmission system
access service charge net collections3
|
(1)
|
12
|
Net
income
|
$
104
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$
46
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1.
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During the fourth
quarter of 2023, the Company realigned its operating segments to
reflect the results of an internal reorganization. The
reorganization resulted in the formation of a new operating
segment, North American Commercial Services, which combines certain
previously existing businesses in a new reportable segment.
Comparative segmented results for 2023 have been restated to align
with the 2024 reportable segment presentation.
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2.
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The change in fair
value of derivative financial instruments represents the change in
fair value of financial electricity purchase contracts between the
electricity market forward prices and the contracted prices at the
end of the reporting period, for the contracted volumes of
electricity.
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3.
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Transmission system
access service charge net collections are the difference between
the transmission system access service charges paid to the
provincial system operators and the transmission system access
service charges collected from electricity retailers. Transmission
system access service charge net collections are timing
differences, which are collected from or returned to electricity
retailers as the transmission system access service charges and
customer billing determinants are finalized.
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SOURCE Epcor Utilities Inc.