EDMONTON, Alberta, Nov. 08, 2018 (GLOBE NEWSWIRE) -- EPCOR Utilities Inc. (EPCOR) today filed its quarterly results for the three months and year-to-date period ended September 30, 2018.
“EPCOR’s financial performance in the third quarter was slightly below expectations but year-to-date performance remains in-line with expectations. Third quarter net income was lower in 2018 compared with 2017 primarily as a result of lower margins with our retail electricity Energy Price Setting Plan as well as fair value losses on electricity purchase contracts and unfavorable timing related to collection of transmission system service charges,” said Stuart Lee, EPCOR President & CEO. “Operationally, EPCOR had continued reliable operation of our water, drainage and electricity infrastructure. In addition we continued our growth in Canada and the U.S.”
“We completed our acquisition of Collingwood PowerStream Utility Corp., an electricity distribution business in Ontario’s Simcoe County in early October 2018, assuming its operations and responsibility for 20 employees,” said Mr. Lee. “In the U.S., we announced our purchase of Rio Verde Utilities, a water and wastewater business in Arizona.”
Highlights of EPCOR’s financial performance are as follows:
Net income was $55 million and $188 million for the three and nine months ended September 30, 2018, respectively, compared to net income of $75 million and $169 million for the comparative periods in 2017, respectively. The decrease of $20 million for the three months ended September 30, 2018, was primarily due to lower transmission system access service charge net collections, higher depreciation expense, as well as higher unfavorable fair value adjustments related to financial electricity purchase contracts, partially offset by higher Adjusted EBITDA, as described below. The increase of $19 million for the nine months ended September 30, 2018, was primarily due to higher Adjusted EBITDA, as described below, partially offset by lower transmission system access service charge net collections, as well as, higher finance and depreciation expense.
Adjusted EBITDA was $176 million and $518 million for the three and nine months ended September 30, 2018, respectively, compared to $164 million and $418 million for the comparative periods in 2017, respectively. The increase of $12 million and $100 million for the three and nine months ended September 30, 2018, respectively, was primarily due to three and nine months of Adjusted EBITDA from drainage utility services (Drainage) in 2018 compared to one month of Adjusted EBITDA in 2017 as the operations were transferred to the Company in September 2017, higher water and wastewater revenues and higher electricity distribution customer rates, partially offset by lower Energy Price Setting Plan margins.
Investment in capital projects and acquisitions was $150 million and $384 million for the three and nine months ended September 30, 2018, respectively, compared with $146 million and $398 million for the corresponding periods in the previous year, respectively. The $14 million decrease for the nine months ended September 30, 2018 was primarily due to lower spending in the Distribution and Transmission segment on the Advanced Meter Infrastructure project and the Work Centre Redevelopment project, both of which were substantially completed in 2017 and the acquisition of Hughes Gas Resources Inc. in 2017 with no corresponding acquisition in 2018. This was partially offset by higher spending in the Water Services segment primarily related to the addition of the Drainage operations.
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 and 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.
