Canadian Utilities Reports Record Earnings in 2017
February 22 2018 - 7:34AM
Canadian Utilities Limited (TSX:CU) (TSX:CU.X)
Canadian Utilities today announced record adjusted earnings for
2017 of $602 million, or $2.23 per share, compared to $590 million,
or $2.21 per share, in 2016. Continued investment and rate base
growth helped our regulated businesses deliver more energy to more
customers than ever before.
Canadian Utilities had fourth quarter, 2017 adjusted earnings of
$162 million, or $0.60 per share, compared to $166 million, or
$0.62 per share, in the fourth quarter of 2016. Lower fourth
quarter earnings were mainly due to lower contributions from the
electricity generation businesses.
Canadian Utilities invested $1,703 million in capital growth
projects in 2017, of which 99 per cent was invested in assets that
earn a return under a regulated business model or are under
commercially secured long-term contracts.
In the 2018 to 2020 period, Canadian Utilities expects to invest
an additional $4.4 billion in Regulated Utility and commercially
secured capital growth projects. This capital investment is
expected to contribute significant earnings and cash flow, and
create long-term value for share owners.
On January 11, 2018, Canadian Utilities declared a first quarter
dividend for 2018 of 39.33 cents per Class A non-voting and Class B
common share. Canadian Utilities’ annual dividend per share has
increased for 46 consecutive years, the longest record of annual
dividend increases of any Canadian publicly traded company.
RECENT DEVELOPMENTS
- In December 2017, Canadian Utilities sold its 24.5 per cent
ownership interest in ATCO Structures & Logistics Ltd. to its
parent company, ATCO Ltd., for cash proceeds of $140 million
resulting in 100 per cent ownership by ATCO.
- In December 2017, Canadian Utilities announced the acquisition
of a long-term contracted, 35 MW hydroelectric power station in
Veracruz, Mexico. The $114 million transaction closed on February
20, 2018.
- In December, Canadian Utilities and CYDSA S.A.B. de C.V.
(CYDSA) announced the signing of a Memorandum of Understanding that
will see the two companies work together to explore and develop
midstream opportunities in Mexico's oil and gas industry. The
initial focus will be on underground hydrocarbon storage in salt
cavern formations and depleted reservoirs, and will also include
opportunities in gas gathering and processing, natural gas liquids
(NGL) extraction and fractionation.
- In November, CU Inc., a subsidiary of Canadian Utilities,
issued $430 million of 3.548 per cent 30-year debentures, the
lowest long-term interest rate in the Company's history. Proceeds
from this issuance were used to fund capital investments, to repay
existing indebtedness, and for other general corporate purposes of
the Alberta Utilities.
- In October, Alberta PowerLine successfully completed the
largest public-private partnership debt financing in Canadian
history with a $1.4 billion bond financing. Alberta PowerLine is a
partnership between Canadian Utilities (80 per cent) and Quanta
Services, Inc. (20 per cent), with a 35-year contract from the
Alberta Electric System Operator to design, build, own, and operate
the Fort McMurray 500-kV Transmission project, running
approximately 500 km from Wabamun, near Edmonton to Fort McMurray,
Alberta. Construction is underway and is proceeding on
schedule.
FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED
EARNINGS
A financial summary and reconciliation of adjusted earnings to
earnings attributable to Class A and Class B shares is provided
below:
|
For the Three Months Ended December
31 |
For the Year Ended December 31 |
($ millions except share data) |
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Adjusted earnings
(1) |
162 |
|
166 |
|
602 |
|
590 |
|
Gain on sales of
operations (2) |
— |
|
— |
|
30 |
|
13 |
|
Unrealized losses on
mark-to-market forward commodity contracts (2) |
(53 |
) |
— |
|
(90 |
) |
— |
|
Impairment (2) |
(7 |
) |
— |
|
(7 |
) |
— |
|
Rate-regulated
activities (2) |
(52 |
) |
22 |
|
(119 |
) |
(42 |
) |
Dividends on equity
preferred shares |
17 |
|
17 |
|
67 |
|
68 |
|
Other
(3) |
(3 |
) |
(9 |
) |
— |
|
(9 |
) |
Earnings
attributable to Class A and Class B shares |
64 |
|
196 |
|
483 |
|
620 |
|
Weighted average
shares |
|
|
|
|
outstanding (millions of shares) |
270.3 |
|
267.8 |
|
269.4 |
|
267.2 |
|
(1) |
Adjusted earnings are
defined as earnings attributable to Class A and Class B shares
after adjusting for the timing of revenues and expenses associated
with rate-regulated activities, dividends on equity preferred
shares of the Company, and unrealized gains or losses on
mark-to-market forward commodity contracts. Adjusted earnings also
exclude one-time gains and losses, significant impairments, and
items that are not in the normal course of business or a result of
day-to-day operations. Adjusted earnings present earnings on the
same basis as was used prior to adopting International Financial
Reporting Standards (IFRS) - that basis being the U.S. accounting
principles for rate- regulated entities - and they are a key
measure used to assess segment performance, to reflect the
economics of rate regulation and to facilitate comparability of
Canadian Utilities’ earnings with other Canadian rate-regulated
companies. |
(2) |
Refer to Note 3 of the
consolidated financial statements for detailed descriptions of the
adjustments. |
(3) |
The Company adjusted for
the deferred tax asset which was recognized as a result of the Tula
Pipeline Project impairment. The adjustment is due to a difference
between the tax base currency, which is the Mexican peso, and the
U.S. dollar functional currency. |
This news release should be used as a preparation for reading
the full disclosure documents. Canadian Utilities’ consolidated
financial statements and management’s discussion and analysis for
the quarter ended December 31, 2017 will be available on the
Canadian Utilities website (www.canadianutilities.com), via SEDAR
(www.sedar.com) or can be requested from the Company.
With approximately 5,400 employees and assets of $21
billion, Canadian Utilities Limited is an ATCO company. ATCO is a
diversified global corporation delivering service excellence and
innovative business solutions in Structures & Logistics
(workforce housing, innovative modular facilities, construction,
site support services, and logistics and operations management);
Electricity (electricity generation, transmission, and
distribution); Pipelines & Liquids (natural gas transmission,
distribution and infrastructure development, energy storage, and
industrial water solutions); and Retail Energy (electricity and
natural gas retail sales). More information can be found
at
www.canadianutilities.com.
Media & Investor Inquiries:
D.A. (Dennis) DeChamplain Senior Vice President & Chief
Financial Officer403-292-7502
|
|
|
Forward-Looking
Information: |
|
|
Certain statements
contained in this news release may 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”, and
similar expressions. |
|
The Company believes that
the expectations reflected in the forward-looking information are
reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking information
should not be unduly relied upon. |
|
|
|
Forward-looking
information involves known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
information. |
|
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. |
The Company’s actual
results could differ materially from those anticipated in this
forward-looking information as a result of regulatory decisions,
competitive factors in the industries in which the Company
operates, prevailing economic conditions, and other factors, many
of which are beyond the control of the Company. |
|
|
|
|
|
Canadian Utilities (TSX:CU.PR.F)
Historical Stock Chart
From Jun 2024 to Jul 2024
Canadian Utilities (TSX:CU.PR.F)
Historical Stock Chart
From Jul 2023 to Jul 2024