AltaGas Reports Record Earnings in First Quarter and Increases
Dividend 16 Percent
CALGARY, ALBERTA--(Marketwired - May 1, 2014) -
First Quarter 2014 Highlights
- Record normalized earnings of $73.7 million, a 33 percent
increase compared to first quarter 2013;
- 23 percent increase to $179.2 million in normalized EBITDA,
compared to first quarter 2013;
- Normalized funds from operations of $129.8 million, compared to
$122.4 million in first quarter 2013;
- Forrest Kerr nears completion with the commencement of
waterflow on April 28; and
- Increased dividend by $0.02 per share per month for an annual
dividend of $1.77 per share.
AltaGas Ltd. (AltaGas)
(TSX:ALA)(TSX:ALA.PR.A)(TSX:ALA.PR.U)(TSX:ALA.PR.E) today reported
record first quarter normalized earnings of $73.7 million ($0.60
per share), compared to $55.5 million ($0.53 per share) in the same
period 2013. Normalized EBITDA increased 23 percent to $179.2
million for the first quarter 2014, compared to $145.9 million for
the same period 2013. Normalized funds from operations was $129.8
million ($1.06 per share) for the three months ended March 31,
2014, compared to $122.4 million ($1.16 per share) for the same
period 2013.
"We are pleased to report a record quarter with strong asset
performance across all our business segments," said David Cornhill,
Chairman and CEO of AltaGas. "The stronger results were driven
mainly by the energy infrastructure assets we added over the past
two years and there is more to come. The Board and management
remain committed to delivering shareholder value as we continue to
execute on our five-year, $2.5 billion growth plans."
Increased earnings in the first quarter were driven by higher
natural gas volumes processed, the partial ownership of Petrogas,
the addition of Blythe, colder weather in Michigan, Alberta and
Nova Scotia, and favorable exchange rates. Results in the quarter
were partially offset by lower earnings from Power in Alberta and
higher costs in Gas related to natural gas storage and extraction
premiums. In addition, the Blythe facility was on major turnaround
during the month of March.
On a GAAP basis, net income applicable to common shares was
$39.9 million ($0.33 per share) for the three months ended March
31, 2014, compared to $49.0 million ($0.46 per share) for the same
period 2013. Net income applicable to common shares includes an
after-tax gain of $9.0 million from the sale of assets, offset by a
non-cash after-tax provision of $28.7 million related to assets
from the acquisition of Taylor NGL Limited Partnership in 2008, a
non-cash after-tax provision of $8.1 million related to a number of
small hydro power assets under development that are in a sales
process, mark-to-market accounting and the cost of early redemption
of medium-term notes.
In the first quarter, AltaGas continued to make progress on its
five-year $2.5 billion growth program. AltaGas sanctioned the Alton
natural gas storage project in Nova Scotia and the regional
liquefied natural gas (LNG) project in Dawson Creek, B.C., for
approximately $125 million. This brings total secured growth
capital to over $1 billion.
Northwest Run-of-river Projects
AltaGas continues to make solid progress on its three Northwest
run-of-river hydro projects. Forrest Kerr completed commissioning
of the head-works and intake structure at the end of March, which
set the stage for the project to achieve a significant milestone on
April 28 with commencement of waterflow into the power tunnel.
Remaining commissioning and construction activities continue on
schedule with the focus on the powerhouse systems and high voltage
switchyard. The tailrace tunnel was completed during first quarter
2014 with all tunnelling and underground excavation work now
finished. AltaGas expects the Northwest Transmission Line to be
available in time to enable Forrest Kerr to be in service by
mid-2014.
At the 16 MW Volcano Creek project, construction continues to
pace ahead of schedule. The tailrace is complete, with no further
in-river work required. The turbine assembly is in progress and the
penstock installation has commenced. The project remains on track
to be in service in late 2014.
At the 66 MW McLymont Creek project, excavation of the
powerhouse foundation is complete and installation of the
powerhouse foundations has commenced. Clearing of the intake access
road is 85 percent complete and approximately 65 percent of the
2,800 metre tunnel has been excavated. The project is expected to
be in service in mid-2015.
Energy Exports
AltaGas has made significant progress in developing its
liquefied petroleum gas (LPG) export business. The AltaGas Idemitsu
Joint Venture Limited Partnership's (AIJVLP) two-thirds ownership
of Petrogas, together with Petrogas' acquisition of the Ferndale
LPG export terminal in the State of Washington are significant
steps in moving the LPG export initiative forward. The goal is to
reach 60,000 Bbls/d of export capability through Ferndale and one
other export facility by the end of the current decade.
AltaGas, Idemitsu and Petrogas are working together to build the
LPG export business from Ferndale. LPG shipments are targeted to
begin in the second quarter of 2014 and increase over the course of
the next few years. In addition to the Ferndale site, the AIJVLP
continues to progress the development of a LPG export terminal on
the west coast of Canada. Terminal sites and refrigeration
technology have been identified and FEED studies are ongoing.
AltaGas continues to advance its LNG export initiative. The
AIJVLP continues to focus on the Triton LNG project, which received
approval from the National Energy Board on April 16, 2014, to
export 2.3 million tonnes of LNG per year. LNG exports are subject
to consultations with First Nations and the completion of the
feasibility study, siting, permitting, regulatory approvals and
facility construction.
The AIJVLP continues to work with various parties to support the
Companies' Creditors Arrangement Act (CCAA) Plan of Arrangement
proceedings for the Douglas Channel LNG project. The various
parties continue to work on completing term sheets which may allow
the project to be restructured under CCAA in accordance with the
terms which have been substantially agreed to by the secured
creditors. The completion of the term sheets is currently targeted
for May 5. If the May 5 deadline is met, AIJVLP plans to develop
definitive agreements and stakeholders are expected to vote on the
CCAA plan of arrangement following the approximately six-week proof
of claim period.
Monthly Common Share Dividend and Quarterly Preferred Share
Dividend
- The Board of Directors increased the dividend by 16 percent and
approved the May 2014 dividend of $0.1475 per common share. The
dividend will be paid on June 16, 2014, to common shareholders of
record on May 26, 2014. The ex-dividend date is May 22, 2014. This
dividend is an eligible dividend for Canadian income tax
purposes;
- The Board of Directors approved a dividend of $0.3125 per share
for the period commencing April 1, 2014 and ending June 30, 2014,
on AltaGas' outstanding Series A Preferred Shares. The dividend
will be paid on June 30, 2014 to shareholders of record on June 17,
2014. The ex-dividend date is June 13, 2014;
- The Board of Directors approved a dividend of US$0.275 per
share for the period commencing April 1, 2014 and ending June 30,
2014, on AltaGas' outstanding Series C Preferred Shares. The
dividend will be paid on June 30, 2014 to shareholders of record on
June 17, 2014. The ex-dividend date is June 13, 2014; and
- The Board of Directors also approved a dividend of $0.3125 per
share for the period commencing April 1, 2014, and ending June 30,
2014, on AltaGas' outstanding Series E Preferred Shares. The
dividend will be paid on June 30, 2014 to shareholders of record on
June 17, 2014. The ex-dividend date is June 13, 2014.
CONSOLIDATED FINANCIAL REVIEW
(unaudited) |
Three months ended March 31 |
($ millions) |
2014 |
2013 |
Revenue |
823.8 |
613.5 |
Net revenue(1) |
296.5 |
237.1 |
Normalized operating income(1) |
137.0 |
109.2 |
Normalized EBITDA(1) |
179.2 |
145.9 |
Net income applicable to common shares |
39.9 |
49.0 |
Normalized net income(1) |
73.7 |
55.5 |
Total assets |
7,377.4 |
5,972.9 |
Total long-term liabilities |
4,044.2 |
3,261.3 |
Net additions to property, plant and equipment |
153.7 |
119.7 |
Dividends declared(2) |
47.0 |
38.0 |
Cash flows |
|
|
|
Normalized funds from operations(1) |
129.8 |
122.4 |
|
Three months ended March 31 |
($ per share, except shares outstanding) |
2014 |
2013 |
Normalized EBITDA(1) |
1.46 |
1.38 |
Net income - basic |
0.33 |
0.46 |
Net income - diluted |
0.32 |
0.45 |
Normalized net income(1) |
0.60 |
0.53 |
Dividends declared(2) |
0.38 |
0.36 |
Cash flows |
|
|
|
Normalized funds from operations(1) |
1.06 |
1.16 |
Shares outstanding - basic (millions) |
|
|
|
During the period(3) |
122.6 |
105.7 |
|
End of period |
122.9 |
106.1 |
(1) Non-GAAP financial
measure; see discussion in Non-GAAP Financial Measures section of
the first quarter 2014 MD&A. |
(2) Dividends declared per
common share per month of $0.12 beginning September 10, 2012,
$0.125 beginning April 24, 2013 and $0.1275 beginning July 31,
2013. |
(3) Weighted
average. |
CONFERENCE CALL AND WEBCAST DETAILS:
AltaGas will hold a conference call today at 9:00 a.m. MT (11:00
a.m. ET) to discuss first quarter financial results, progress on
construction projects and other corporate developments.
Members of the media, investment communities and other
interested parties may dial (416) 340-2218 or call toll free at
1-866-225-0198. There is no passcode. Please note that the
conference call will also be webcast. To listen, please go to
http://www.altagas.ca/investors/presentations_and_events. The
webcast will be archived for one year.
Shortly after the conclusion of the call, a replay will be
available by dialing (905) 694-9451 or 1-800-408-3053. The passcode
is 6350008. The replay expires at midnight (Eastern) on May 8,
2014.
AltaGas is an energy infrastructure business with a focus on
natural gas, power and regulated utilities. AltaGas creates value
by acquiring, growing and optimizing its energy infrastructure,
including a focus on clean energy sources. For more information
visit: www.altagas.ca.
This news release contains forward-looking statements. When
used in this news release, the words "may", "would", "could",
"will", "intend", "plan", "anticipate", "believe", "seek",
"propose", "estimate", "expect", and similar expressions, as they
relate to AltaGas or an affiliate of AltaGas, are intended to
identify forward-looking statements. In particular, this news
release contains forward-looking statements with respect to, among
other things, business objectives, expected growth, results of
operations, performance, business projects and opportunities and
financial results. These statements involve 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 statements. Such statements reflect AltaGas'
current views with respect to future events based on certain
material factors and assumptions and are subject to certain risks
and uncertainties, including without limitation, changes in market,
competition, governmental or regulatory developments, general
economic conditions and other factors set out in AltaGas' public
disclosure documents. Many factors could cause AltaGas' actual
results, performance or achievements to vary from those described
in this news release, including without limitation those listed
above. These factors should not be construed as exhaustive. Should
one or more of these risks or uncertainties materialize, or should
assumptions underlying forward-looking statements prove incorrect,
actual results may vary materially from those described in this
news release as intended, planned, anticipated, believed, sought,
proposed, estimated or expected, and such forward-looking
statements included in, or incorporated by reference in this news
release, should not be unduly relied upon. Such statements speak
only as of the date of this news release. AltaGas does not intend,
and does not assume any obligation, to update these forward-looking
statements. The forward-looking statements contained in this news
release are expressly qualified by this cautionary
statement.
AltaGas Ltd.Investment
Community1-877-691-7199investor.relations@altagas.caAltaGas
Ltd.Media(403) 269-5701media.relations@altagas.cawww.altagas.ca
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