EDMONTON, AB, July 31,
2024 /CNW/ - EPCOR Utilities Inc. (EPCOR) today filed
its quarterly results for the period ended June 30, 2024.
"EPCOR's second quarter financial performance was in line with
expectations, reflecting continued customer growth across the
company's footprint and higher levels of commercial activity," said
John Elford, EPCOR President &
CEO. "The safety and reliability of utility systems remains top of
mind for us and our customers."
"Commercial growth in our U.S. operations remained on-track, as
EPCOR's progress continued on the construction of two commercial
water projects in Texas, and we
funded $134 million of our long-term
investment in the groundwater supply system," said Mr. Elford.
"Several regulated and commercial projects reached milestones in
the second quarter. At the Genesee power plant site in Alberta, we energized and placed into service
electricity transmission infrastructure that connects new
generation units to the provincial grid, strengthening access to
power supplies. In Ontario, EPCOR
has begun supplying demineralized water to the Darlington nuclear facility as part of the
project's performance testing phase. As previously announced, EPCOR
also entered into an agreement to acquire the water and wastewater
utility systems for the master-planned community of Harmony near
Calgary, with regulatory approvals
expected later this year."
Highlights of EPCOR's financial performance are as follows:
- Net income was $104 million and
$208 million for the three and six
months ended June 30, 2024, compared
with net income of $102 million and
$148 million for the comparative
periods in 2023, respectively. The increase of $2 million for the three months ended
June 30, 2024 was primarily due to
higher Adjusted EBITDA1, partially offset by fair value
adjustments related to financial electricity purchase contracts.
The increase of $60 million for the
six months ended June 30, 2024 was
primarily due to higher Adjusted EBITDA1, and fair value
adjustments related to financial electricity purchase contracts,
partially offset by lower transmission system access service charge
net collections and higher income tax expense.
- Adjusted EBITDA1 was $274
million and $534 million for
the three and six months ended June 30,
2024, compared with $258
million and $502 million for
the comparative periods in 2023, respectively. The increase of
$16 million and $32 million for the three and six months ended
June 30, 2024, was primarily due to
higher rates, and higher commercial activity, partially offset by
lower construction activity.
- Capital expenditures were $431
million for the six months ended June
30, 2024, compared with $445
million for the corresponding period in 2023.
Interim management's discussion and analysis and the unaudited
condensed consolidated interim financial statements are available
on EPCOR's website (www.epcor.com) and SEDAR+
(www.sedarplus.ca).
EPCOR builds, owns and operates electrical, natural gas and
water transmission and distribution networks, water and wastewater
treatment facilities, and sanitary and stormwater systems in
Canada and the United States. EPCOR also provides
electricity, natural gas and water products and services to
residential and commercial customers. EPCOR, headquartered in
Edmonton, is committed to
conducting its business and operations safely and responsibly.
Environmental stewardship, public health and community well-being
are at the heart of EPCOR's mission to provide clean water and
safe, reliable energy. EPCOR is one of Alberta's Top 80 Employers, is ranked among
Corporate Knights' 2024 Best 50 Corporate Citizens in Canada and is designated a Utility of the
Future Today by the Water Environment Federation.
- Adjusted EBITDA is a non-GAAP financial measure. See the
Non-GAAP Financial Measures section in Appendix 1 to this media
release.
Appendix 1 Non-GAAP Financial Measures
EPCOR uses earnings before finance expenses, income tax recovery
(expense), depreciation and amortization, changes in the fair value
of derivative financial instruments, transmission system access
service charge net collections and other unusual items
(collectively, Adjusted EBITDA) to discuss operating results for
EPCOR's lines of business. Adjusted EBITDA is a non-GAAP financial
measure and is not a standardized financial measure under IFRS
Accounting Standards and might not be comparable to similar
financial measures disclosed by other issuers.
The reconciliation between Adjusted EBITDA to Net income as
reported under IFRS Accounting Standards is shown below:
|
|
|
|
|
($ millions)
|
Three months
ended
June
30,
|
Six months
ended
June
30,
|
|
2024
|
2023
(restated)1
|
2024
|
2023
(restated)1
|
Adjusted EBITDA by
Segment
|
|
|
|
|
Water Services
segment
|
$
123
|
$
116
|
$
229
|
$
208
|
Distribution and
Transmission segment
|
71
|
62
|
141
|
122
|
Energy Services
segment
|
13
|
8
|
28
|
30
|
North American
Commercial Services segment
|
17
|
31
|
41
|
57
|
U.S. Regulated Water
segment
|
38
|
37
|
75
|
71
|
Other
|
12
|
4
|
20
|
14
|
Adjusted
EBITDA
|
274
|
258
|
534
|
502
|
Finance
expenses
|
(51)
|
(47)
|
(101)
|
(94)
|
Income tax
expense
|
(6)
|
(10)
|
(15)
|
(2)
|
Depreciation and
amortization
|
(109)
|
(110)
|
(212)
|
(210)
|
Change in fair value of
financial electricity purchase contracts2
|
-
|
13
|
7
|
(58)
|
Transmission system
access service charge net collections3
|
(4)
|
(2)
|
(5)
|
10
|
Net
income
|
$
104
|
$
102
|
$
208
|
$
148
|
- 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.
- 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.
- 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.
![EPCOR Utilities Inc. Management's Discussion and Analysis For six months ended June 30, 2024 (CNW Group/Epcor Utilities Inc.) EPCOR Utilities Inc. Management's Discussion and Analysis For six months ended June 30, 2024 (CNW Group/Epcor Utilities Inc.)](https://mma.prnewswire.com/media/2473187/Epcor_Utilities_Inc__EPCOR_Announces_Quarterly_Results.pdf?p=pdfthumbnail)
SOURCE Epcor Utilities Inc.