EDMONTON, Alberta, Oct. 31, 2019 (GLOBE NEWSWIRE) -- EPCOR Utilities Inc. (EPCOR) today filed its quarterly results for the three months and year-to-date period ended September 30, 2019.
“EPCOR saw good results in our Energy Services and U.S Operations businesses which led to an increase in third quarter net income to $76 million in 2019 compared to $55 million in 2018. Net income for the quarter increased from 2018 despite adverse weather conditions which resulted in lower water-demand related revenues and higher water treatment costs in our Canadian operations, as well as, lower work on street-lighting and traffic signals for the City of Edmonton,” said Stuart Lee, EPCOR President & CEO.
Highlights of EPCOR’s financial performance are as follows:
Net income was $76 million and $172 million for the three and nine months ended September 30, 2019, respectively, compared with net income of $55 million and $188 million for the comparative periods in 2018, respectively. The increase of $21 million for the three months ended September 30, 2019, was primarily due to higher Adjusted EBITDA, as described in the following paragraph, higher transmission system access service charge net collections and lower unfavorable fair value adjustments related to financial electricity purchase contracts, partially offset by higher income tax, depreciation and finance expenses. The decrease of $16 million for the nine months ended September 30, 2019, was primarily due to higher income tax, depreciation and finance expenses, partially offset by higher Adjusted EBITDA, as described in the following paragraph, favorable fair value adjustments related to financial electricity purchase contracts and higher transmission system access service charge net collections.
Adjusted EBITDA was $202 million and $536 million for the three and nine months ended September 30, 2019, respectively, compared with $176 million and $518 million for the comparative periods in 2018, respectively. Adjusted EBITDA increased $26 million for the three months ended September 30, 2019, primarily due to higher water and wastewater rates and customer growth, higher electricity distribution and transmission rates, higher Energy Price Setting Plan (EPSP) margins and recognition of lower rent expense related to implementation of IFRS 16, which is now being recorded as depreciation on right-of-use (ROU) assets and finance expense related to lease liabilities. These increases were partially offset by lower work volumes for street lighting, traffic signals and light rail transit electrical services for the City of Edmonton (the City), lower water consumption resulting from lower temperatures and higher precipitation in the city of Edmonton and higher water treatment costs due to poor water quality of the North Saskatchewan River. Adjusted EBITDA increased by $18 million for nine months ended September 30, 2019, primarily due to higher water and wastewater rates and customer growth, higher electricity distribution and transmission rates, higher EPSP margins and recognition of lower rent expense related to implementation of IFRS 16, which is now being recorded as depreciation on ROU assets and finance expense related to lease liabilities. These increases were partially offset by lower work volumes for street lighting, traffic signals and light rail transit electrical services for the City, lower water consumption resulting from lower temperatures and higher precipitation, lower water revenues in Arizona due to a tax reform adjustment credit on customer bills and higher water treatment costs due to poor water quality of the North Saskatchewan River.
Investment in capital projects was $510 million for the nine months ended September 30, 2019, compared with $384 million for the corresponding period in the 2018. The increase of $126 million was primarily due to the acquisition of Rio Verde Utilities Inc. in Arizona, higher spending in the Water Services segment including on the Groat Road Sewer Trunk line rehabilitation and private water transmission main development projects, higher spending in the Distribution and Transmission segment including on a new substation in southwest Edmonton and an underground transmission line in the Norwood community of Edmonton, as well as, spending on Southern Bruce Design and Construction project, and on our new customer billing system.
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.sedar.com).
EPCOR, through its wholly owned subsidiaries, builds, owns and operates electrical, natural gas and water transmission and distribution networks, water and wastewater treatment facilities, sanitary and stormwater systems, and infrastructure in Canada and the United States. The Company also provides electricity, natural gas and water products and services to residential and commercial customers. EPCOR, headquartered in Edmonton, is an Alberta Top 70 employer. EPCOR’s website address is www.epcor.com.
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