Canadian Utilities Reports 2014 Second Quarter Earnings
Press Release –
Calgary, AB – July 28, 2014 – Canadian Utilities Limited (TSX:CU) (TSX:CU.X)
Canadian Utilities today reported second quarter adjusted earnings of $85 million in 2014 compared to $131 million in 2013. Adjusted earnings were $271 million for the six months ended June 30, 2014 compared to $311 million for the same period of 2013. Major drivers of this decrease were unfavourable market conditions in the Company’s power generation business and an Alberta Utilities Commission (AUC) decision received by the Utilities in the second quarter.
The decrease in earnings in ATCO Power was primarily due to a 66% decline in the average Alberta Power Pool price in the second quarter of 2014 over the same period in 2013 and higher natural gas input costs. Also contributing to the decrease were higher business development costs to pursue power generation opportunities and the launch of ATCO Power’s recently announced commercial and industrial sales program.
The decrease in earnings was also impacted by the AUC decision for information technology (IT) in the second quarter of 2014. The decision covers an unusually long period from the start of 2010 to the end of 2014. It reduced the Company’s adjusted earnings in the second quarter by $26 million, of which only $2 million related to the second quarter of 2014, and $24 million related to prior periods. The Utilities continued to invest in electricity and natural gas transmission and distribution facilities to support growth in the province and replace aging infrastructure. ATCO Electric, ATCO Gas and ATCO Pipelines collectively invested $501 million in the second quarter, bringing the total for the first half of 2014 to $1 billion.
Earnings attributable to equity owners were $115 million for the quarter ended June 30, 2014 compared to $160 million in the same period of 2013. Earnings attributable to equity owners were $336 million for the six months ended June 30, 2014 compared to $343 million in the same period of 2013.
RECENT DEVELOPMENTS
- Canadian Utilities declared a third quarter dividend for 2014 of 26.75 cents per Class A non-voting and Class B common share. Canadian Utilities’ annual dividend per share has increased for 42 consecutive years.
- The Company announced it has competitively outsourced its information technology (IT) services to Wipro Ltd. (Wipro), a global IT, consulting and business process services company. Wipro will provide the Company with a complete suite of IT services. Wipro will also acquire the shares of ATCO I-Tek and the assets of ATCO I-Tek Australia. The sale is expected to close in the third quarter of 2014 subject to customary closing conditions.
NT2
