CALGARY,
AB, May 2, 2024 /CNW/ - ATCO Ltd. (TSX:
ACO.X) (TSX: ACO.Y)
ATCO Ltd. (ATCO or the Company) today announced first quarter
2024 adjusted earnings of $148
million ($1.32 per share),
$11 million ($0.11 per share) higher compared to $137 million ($1.21
per share) in the first quarter of 2023.
First quarter earnings attributable to Class I and Class II
Shares reported in accordance with International Financial
Reporting Standards (IFRS earnings) were $147 million ($1.31
per share), $20 million ($0.16 per share) lower compared to $167 million ($1.47
per share) in the first quarter of 2023.
IFRS earnings include timing adjustments related to
rate-regulated activities, unrealized gains or losses on
mark-to-market forward and swap commodity contracts, one-time gains
and losses, impairments, and items that are not in the normal
course of business or a result of day-to-day operations. These
items are not included in adjusted earnings.
RECENT DEVELOPMENTS
ATCO Structures
- Awarded a $28 million rental
contract for 363 space rentals units supporting an LNG facility in
the South Central United States. The rental term is expected to
commence in the fourth quarter of 2024 for a term of 36
months.
- Awarded a $26 million supply and
delivery contract for a 200-person camp in support of a mining
project located in the Pilbara, 150-km south of Port Hedland,
Western Australia. Manufacturing
commenced during the first quarter of 2024 with final delivery
anticipated in the third quarter of 2024.
- Awarded a $12 million supply and
delivery contract for a 100-person camp and a 64-person camp in
Western Australia. Manufacturing
concluded during the first quarter of 2024 with final delivery
anticipated in the third quarter of 2024.
- Awarded a $11 million supply and
delivery contract for 58 blast-resistant, non-processing
infrastructure buildings in support of an LNG Facility in
Western Australia. Manufacturing
commenced during the first quarter of 2024 with final delivery
anticipated in the fourth quarter of 2024.
Canadian Utilities
- On March 27, 2024, the Alberta
Utilities Commission (AUC) issued a decision for Natural Gas
Transmission's 2024-2026 General Rate Application. In December 2023, a comprehensive Negotiated
Settlement Agreement (NSA) was reached with all participating
interveners, and an application was filed with the AUC in
January 2024. This recent decision
approved the NSA for 2024 and 2025 in its entirety but limited the
approval to two years.
- In the first quarter of 2024, ATCO changed its operating
segment structure to better align current strategy and future
growth objectives. This change involved creating a new operating
segment, ATCO Australia, which
includes natural gas distribution (ATCO Gas Australia) and
electricity generation operations (ATCO Power Australia) based in
Australia. Previously, ATCO
Australia's natural gas
distribution operations were reported in the ATCO Energy Systems
operating segment and the electricity generation operations were
reported in the ATCO EnPower operating segment. In addition, ATCO
Australia's corporate office was
included in Canadian Utilities Corporate & Other.
- Incurred $316 million in capital
expenditures in the first quarter of 2024, of which 94 per cent was
invested in our regulated utilities in ATCO Energy Systems and ATCO
Australia, and 6 per cent mainly
in ATCO EnPower.
Corporate
- On April 11, 2024, ATCO declared
a second quarter dividend of 48.98
cents per share or $1.96 per
share on an annualized basis per Class I non-voting and Class II
voting share.
FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED
EARNINGS
A financial summary of the consolidated subsidiaries of ATCO and
a reconciliation of adjusted earnings to earnings attributable to
Class I non-voting shares and Class II voting shares is provided
below:
|
Three Months Ended
March 31
|
($ millions except share data)
|
2024
|
2023
|
|
|
|
Adjusted
Earnings
|
148
|
137
|
Unrealized gains on
mark-to-market forward and swap
commodity contracts
(1)
|
6
|
32
|
Rate-regulated
activities (2)
|
(4)
|
5
|
IT Common Matters
decision (3)
|
(3)
|
(3)
|
Transition of managed
IT services (4)
|
—
|
(5)
|
Other
|
—
|
1
|
|
|
|
Earnings attributable
to Class I non-voting and Class II voting shares
|
147
|
167
|
Weighted average shares
outstanding (millions of shares)
|
112.2
|
113.6
|
(1)
|
The Company's electricity generation and retail
electricity and natural gas businesses in Alberta enter into
fixed-price swap commodity contracts to manage exposure to
electricity and natural gas prices and volumes. These contracts are
measured at fair value. Unrealized gains and losses due to changes
in the fair value of the fixed-price swap commodity contracts in
the electricity generation and electricity and natural gas retail
businesses are recognized in the earnings of the ATCO EnPower and
Corporate & Other segments, respectively. Realized gains or
losses are recognized in adjusted earnings when the commodity
contracts are settled.
|
(2)
|
The Company records significant timing adjustments as
a result of the differences between rate-regulated accounting and
International Financial Reporting Standards with respect to
additional revenues billed in the current year, revenues to be
billed in future years, regulatory decisions received, and
settlement of regulatory decisions and other
items.
|
(3)
|
Consistent with the treatment of the gain on sale in
2014 from the IT services business by the Company, financial
impacts associated with the IT Common Matters decision are excluded
from adjusted earnings.
|
(4)
|
In the first quarter of 2023, the Company recognized
legal and other costs of $5 million (after-tax and non-controlling
interests) related to the Wipro Ltd. master services agreements
matter that was concluded on February 26,
2023.
|
This news release should be read in concert with the full
disclosure documents. ATCO's unaudited consolidated financial
statements and management's discussion and analysis for the quarter
ended March 31, 2024 will be available on the ATCO website
(www.ATCO.com), via SEDAR+ (www.sedarplus.ca) or can be requested
from the Company.
TELECONFERENCE AND WEBCAST
ATCO will hold a live teleconference and webcast with
Katie Patrick, Executive Vice
President, Chief Financial & Investment Officer and
Adam Beattie, President, Structures,
at 10:00 am Mountain Time
(12:00 pm Eastern Time) on
Thursday, May 2, 2024 at
1-844-763-8274. No pass code is required.
Opening remarks will be followed by a question and answer period
with investment analysts. Participants are asked to please dial-in
10 minutes prior to the start and request to join the ATCO
teleconference.
Management invites interested parties to listen via live webcast
at:
https://www.atco.com/en-ca/about-us/investors/events-presentations.html.
A replay of the teleconference will be available approximately
two hours after the conclusion of the call until June 2, 2024. Please call 1-855-669-9658 and
enter pass code 0790.
As a global enterprise ATCO Ltd. and its subsidiary and
affiliate companies have approximately 20,000 employees and assets
of $25 billion. ATCO is committed to
future prosperity by working to meet the world's essential energy,
housing, security and transportation challenges. ATCO Structures
designs, builds and delivers products to service the essential need
for housing and shelter around the globe. ATCO Frontec provides
operational support services to government, defence and commercial
clients. ATCO Energy Systems delivers essential energy for an
evolving world through its electricity and natural gas transmission
and distribution, and international operations. ATCO EnPower
creates sustainable energy solutions in the areas of renewables,
energy storage, industrial water and clean fuels. ATCO Australia develops, builds, owns and operates
energy and infrastructure assets. ATCOenergy and Rümi provide
retail electricity and natural gas services, home maintenance
services and professional home advice that bring exceptional
comfort, peace of mind and freedom to homeowners and customers.
ATCO also has investments in ports and transportation logistics,
the processing and marketing of fly ash, retail food services and
commercial real estate. More information can be found at
www.ATCO.com.
Investor & Analyst Inquiries:
Colin Jackson
Senior Vice President, Finance, Treasury & Sustainability
Colin.Jackson@atco.com
(403) 808 2636
Media Inquiries:
Kurt Kadatz
Director, Corporate Communications
Kurt.Kadatz@atco.com
(587) 228 4571
Subscription Inquiries:
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Other Financial and Non-GAAP
Measures
This news release includes references to
"adjusted earnings" which is a "total of segments measure" as that
term is defined in National Instrument 52-112 Non-GAAP and Other
Financial Measures Disclosure. The most directly comparable measure
reported in accordance with International Financial Reporting
Standards is "earnings attributable to Class I and Class II
shares". For additional information, see "Financial Summary and
Reconciliation of Adjusted Earnings" in this news release, and
"Other Financial and Non-GAAP Measures" in the Company's
Management's Discussion and Analysis for the three months ended
March 31, 2024, which is available at
www.sedarplus.ca.
Forward-Looking
Information
Certain statements contained in this news
release constitute forward-looking information. Forward-looking
information is often, but not always, identified by the use of
words such as "anticipate", "plan", "estimate", "expect", "may",
"will", "intend", "should", "goals", "targets", "strategy",
"future", and similar expressions. In particular, forward-looking
information in this news release includes, but is not limited to,
references to: the expected value, timing and term of contracts;
the expected timing of commencement, completion or commercial
operations of activities, contracts and projects; and the payment
of dividends.
Although the Company believes that the expectations reflected
in the forward-looking information are reasonable based on the
information available on the date such statements are made and
processes used to prepare the information, such statements are not
guarantees of future performance and no assurance can be given that
these expectations will prove to be correct. Forward-looking
information should not be unduly relied upon. By their nature,
these statements involve a variety of assumptions, known and
unknown risks and uncertainties, and other factors, which may cause
actual results, levels of activity, and achievements to differ
materially from those anticipated in such forward-looking
information. The forward-looking information reflects the Company's
beliefs and assumptions with respect to, among other things, the
development and performance of technology and technological
innovations; continuing collaboration with certain business
partners, and regulatory and environmental groups; the performance
of assets and equipment; the ability to meet current project
schedules, and other assumptions inherent in management's
expectations in respect of the forward-looking information
identified herein.
The Company's actual results could differ materially from
those anticipated in this forward-looking information as a result
of, among other things, risks inherent in the performance of
assets; capital efficiencies and cost savings; applicable laws,
regulations and government policies; regulatory decisions;
competitive factors in the industries in which the Company
operates; prevailing market and economic conditions; credit risk;
interest rate fluctuations; the availability and cost of labour,
materials, services, and infrastructure; future demand for
resources; the development and execution of projects; prices of
electricity, natural gas, natural gas liquids, and renewable
energy; the development and performance of technology and new
energy efficient products, services, and programs including but not
limited to the use of zero-emission and renewable fuels, carbon
capture, and storage, electrification of equipment powered by
zero-emission energy sources and utilization and availability of
carbon offsets; the termination or breach of contracts by contract
counterparties; the occurrence of unexpected events such as fires,
extreme weather conditions, explosions, blow-outs, equipment
failures, transportation incidents, and other accidents or similar
events; global pandemics; geopolitical tensions and wars; and other
risk factors, many of which are beyond the control of the Company.
Due to the interdependencies and correlation of these factors, the
impact of any one material assumption or risk on a forward-looking
statement cannot be determined with certainty. Readers are
cautioned that the foregoing lists are not exhaustive. For
additional information about the principal risks that the Company
faces, see "Business Risks and Risk Management" in the Company's
Management's Discussion and Analysis for the year ended
December 31, 2023.
Any forward-looking information contained in this news
release represents the Company's expectations as of the date
hereof, and is subject to change after such date. The Company
disclaims any intention or obligation to update or revise any
forward-looking information whether as a result of new information,
future events or otherwise, except as required by applicable
securities legislation.
SOURCE ATCO Ltd.