CALGARY, AB, Feb. 23, 2022
/CNW/ - Canadian Utilities Limited (TSX: CU) (TSX: CU.X)
Canadian Utilities Limited (Canadian Utilities or the Company)
today announced adjusted earnings in 2021 of $586 million ($2.17
per share), which were $51 million
($0.21 per share) higher compared to
$535 million ($1.96 per share) in 2020. Fourth quarter adjusted
earnings in 2021 of $192 million
($0.71 per share), were $6 million ($0.03
per share) higher compared to $186
million ($0.68 per share) in
the fourth quarter of 2020.
2021 earnings attributable to equity owners of the Company
reported in accordance with International Financial Reporting
Standards (IFRS earnings), were $393
million ($1.21 per Class A and
Class B share), which were $34
million ($0.11 per Class A and
Class B share) lower compared to $427
million ($1.32 per Class A and
Class B share) in 2020. Fourth quarter 2021 IFRS earnings were
$176 million ($0.59 per Class A and Class B share), which were
$72 million ($0.27 per Class A and Class B share) higher
compared to $104 million
($0.32 per Class A and Class B share)
in the fourth quarter of 2020.
IFRS earnings include timing adjustments related to
rate-regulated activities, dividends on equity preferred shares of
the Company, unrealized gains or losses on mark-to-market forward
and swap commodity contracts, one-time gains and losses,
impairments, and items that are not in the normal course of
business or a result of day-to-day operations. These items are not
included in adjusted earnings.
RECENT DEVELOPMENTS IN THE FOURTH QUARTER OF 2021
- Invested $334 million in capital
projects in the fourth quarter of 2021, of which 75 per cent was
invested in regulated utilities and 25 per cent mainly in Energy
Infrastructure.
- Announced the acquisition of the Alberta Hub natural gas
storage facility near Edson,
Alberta. The Alberta Hub underground natural gas storage
facility has a capacity of approximately 49 petajoules and is
connected to the NOVA Gas Transmission (NGTL) system.
- On January 18, 2022, Canadian
Utilities' parent company, ATCO, announced a comprehensive set of
2030 environmental, social and governance targets, and a commitment
to achieve net zero greenhouse gas (GHG) emissions by 2050.
- On January 13, 2022, Canadian
Utilities declared a first quarter dividend of 44.42 cents per share or $1.78 per Class A non-voting and Class B common
share on an annualized basis, a 1 per cent increase over the
43.98 cents paid in each of the four
previous quarters. Canadian Utilities has increased its dividend
per share for 50 consecutive years, the longest track record of
annual dividend increases of any publicly traded Canadian
company.
FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED
EARNINGS
A financial summary and reconciliation of adjusted earnings to
earnings attributable to equity owners of the Company is provided
below:
|
For the Three
Months
Ended December
31
|
For the
Year
Ended December
31
|
($ millions except
share data)
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
Consolidated adjusted
earnings
|
192
|
186
|
586
|
535
|
Impairment and other
costs (1)
|
—
|
—
|
(65)
|
(30)
|
Unrealized gains
(losses) on mark-to-market forward and swap commodity contracts
(2)
|
7
|
(8)
|
(18)
|
(8)
|
Rate-regulated
activities (3)
|
(27)
|
(27)
|
(118)
|
(59)
|
IT Common Matters
decision (4)
|
(4)
|
(9)
|
(14)
|
(19)
|
Transition of managed
IT services (5)
|
(8)
|
(55)
|
(42)
|
(55)
|
Dividends on equity
preferred shares of Canadian Utilities Limited
|
16
|
17
|
65
|
67
|
Other
|
—
|
—
|
(1)
|
(4)
|
|
|
|
|
|
Earnings attributable
to equity owners of the Company
|
176
|
104
|
393
|
427
|
Weighted average
shares outstanding (millions of shares)
|
268.9
|
272.8
|
269.9
|
272.8
|
|
|
(1)
|
In 2021, Canadian
Utilities recorded impairments and other costs not in the normal
course of business of $65 million (after-tax). The Company incurred
$54 million of these costs in Mexico, related mainly to its
Veracruz hydro facility within its Energy Infrastructure segment.
The charge reflects an adverse arbitration decision, changes in
market regulations, ongoing political uncertainty, and a
challenging operating environment, resulting in an impairment of
the carrying value of the assets. Other costs recorded were
individually immaterial.
|
(2)
|
The Company's
retail electricity and natural gas business in Alberta enters into
fixed-price swap commodity contracts to manage exposure to
electricity and natural gas prices and volumes. These contracts are
measured at fair value. Unrealized gains and losses due to changes
in the fair value of the fixed-price swap commodity contracts are
recognized in the earnings of the Corporate & Other segment.
Realized gains or losses are recognized in adjusted earnings when
the commodity contracts are settled.
|
(3)
|
The Company
records significant timing adjustments as a result of the
differences between rate-regulated accounting and International
Financial Reporting Standards with respect to additional revenues
billed in current year, revenues to be billed in future years,
regulatory decisions received, and settlement of regulatory
decisions and other items.
|
(4)
|
Consistent with
the treatment of the gain on sale in 2014 from the IT services
business by the Company, financial impacts associated with the IT
Common Matters decision are excluded from adjusted
earnings.
|
(5)
|
In the fourth
quarter of 2020 and first quarter of 2021, the Company signed
Master Services Agreements (MSA) with IBM Canada Ltd. (subsequently
novated to Kyndryl Canada Ltd.) and IBM Australia Limited,
respectively, to provide managed IT services. These services were
previously provided by Wipro under a ten-year MSA expiring in
December 2024. The transition of the managed IT services from Wipro
to IBM commenced on February 1, 2021 and is
complete.
|
This news release should be read in concert with the full
disclosure documents. Canadian Utilities' consolidated financial
statements and management's discussion and analysis for the year
ended December 31, 2021 will be available on the Canadian
Utilities website (www.canadianutilities.com), via SEDAR
(www.sedar.com) or can be requested from the Company.
TELECONFERENCE AND WEBCAST
Canadian Utilities will hold a live teleconference and webcast
at 9:00 am Mountain Time
(11:00 am Eastern Time) on
Thursday, February 24, 2022 at
1-800-319-4610. No pass code is required.
Brian Shkrobot, Executive Vice
President & Chief Financial Officer, will discuss year-end 2021
financial results and recent developments. Opening remarks will be
followed by a question and answer period with investment analysts.
Participants are asked to please dial-in 10 minutes prior to the
start and request to join the Canadian Utilities
teleconference.
Management invites interested parties to listen via live webcast
at: https://www.canadianutilities.com/en-ca/investors/events-presentations.html
A replay of the teleconference will be available approximately
two hours after the conclusion of the call until March 24, 2022. Please call 1-800-319-6413 and
enter pass code 8318. An archive of the webcast will be available
on February 24, 2022 and a transcript
of the call will be posted on
https://www.canadianutilities.com/en-ca/investors/events-presentations.html
within a few business days.
With approximately 4,800 employees and assets of $21 billion, Canadian Utilities Limited is an
ATCO company. Canadian Utilities is a diversified global energy
infrastructure corporation delivering essential services and
innovative business solutions in Utilities (electricity and natural
gas transmission and distribution, and international operations);
Energy Infrastructure (energy storage, energy generation,
industrial water solutions, and clean fuels); and Retail Energy
(electricity and natural gas retail sales, and whole-home
solutions). More information can be found at
www.canadianutilities.com.
Investor & Analyst Inquiries:
Colin Jackson
Senior Vice President, Finance, Treasury, Risk &
Sustainability
Colin.Jackson@atco.com
(403) 808 2636
Media Inquiries:
Kurt
Kadatz
Senior Manager, Corporate Communications
Kurt.Kadatz@atco.com
(587) 228 4571
Subscription Inquiries:
To receive Canadian Utilities
Limited news releases, please click here.
Non-GAAP and
Other Financial Measures This news release includes
references to "adjusted earnings" which is a "total of segments
measure" as that term is defined in National Instrument 52-112
Non-GAAP and Other Financial Measures Disclosure. The most directly
comparable measure that is reported in accordance with
International Financial Reporting Standards (IFRS) is "earnings
attributable to equity owners of the Company". For additional
information, see "Financial Summary and Reconciliation of Adjusted
Earnings" in this news release, and "Non-GAAP and Other Financial
Measures" and "Reconciliation of Adjusted Earnings to Earnings
Attributable to Equity Owners of the Company" in Management's
Discussion and Analysis for the year-ended December 31,
2021.
|
|
Forward-Looking
Information Certain statements contained in this
news release constitute forward-looking information.
Forward-looking information is often, but not always, identified by
the use of words such as "anticipate", "plan", "estimate",
"expect", "may", "will", "intend", "should", "goals", "targets",
"strategy", "future", and similar expressions. In particular,
forward-looking information in this news release includes, but is
not limited to, references to general strategic plans and targets,
including with respect to reducing GHG emissions.
|
|
Although the
Company believes that the expectations reflected in the
forward-looking information are reasonable based on the information
available on the date such statements are made and processes used
to prepare the information, such statements are not guarantees of
future performance and no assurance can be given that these
expectations will prove to be correct. Forward-looking information
should not be unduly relied upon. By their nature, these statements
involve a variety of assumptions, known and unknown risks and
uncertainties, and other factors, which may cause actual results,
levels of activity, and achievements to differ materially from
those anticipated in such forward-looking information. The
forward-looking information reflects the Company's beliefs and
assumptions with respect to, among other things, the Company's
ability to successfully achieve its net zero GHG target by 2050;
the development and performance of technology and technological
innovations and the ability to otherwise access and implement all
technology necessary to achieve GHG and other environmental, social
and governance targets; continuing collaboration with certain
regulatory and environmental groups; the performance of assets and
equipment; demand levels for oil, natural gas, gasoline, diesel and
other energy sources; certain levels of future energy use; future
production rates; future revenue and earnings; the ability to meet
current project schedules, and other assumptions inherent in
management's expectations in respect of the forward-looking
information identified herein.
|
|
The Company's
actual results could differ materially from those anticipated in
this forward-looking information as a result of, among other
things, risks inherent in the performance of assets; capital
efficiencies and cost savings; applicable laws and government
policies; regulatory decisions; competitive factors in the
industries in which the Company operates; prevailing economic
conditions (including as may be affected by the COVID-19 pandemic);
credit risk; interest rate fluctuations; the availability and cost
of labour, materials, services, and infrastructure; the development
and execution of projects; prices of electricity, natural gas,
natural gas liquids, and renewable energy; the development and
performance of technology and new energy efficient products,
services, and programs including but not limited to the use of
zero-emission and renewable fuels, carbon capture, and storage,
electrification of equipment powered by zero-emission energy
sources and utilization and availability of carbon offsets; the
occurrence of unexpected events such as fires, severe weather
conditions, explosions, blow-outs, equipment failures,
transportation incidents, and other accidents or similar events;
and other risk factors, many of which are beyond the control of the
Company. Due to the interdependencies and correlation of these
factors, the impact of any one material assumption or risk on a
forward-looking statement cannot be determined with certainty.
Readers are cautioned that the foregoing lists are not exhaustive.
For additional information about the principal risks that the
Company faces, see "Business Risks and Risk Management" in
Management's Discussion and Analysis for the year-ended December
31, 2021.
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|
Any
forward-looking information contained in this news release
represents the Company's expectations as of the date hereof, and is
subject to change after such date. The Company disclaims any
intention or obligation to update or revise any forward-looking
information whether as a result of new information, future events
or otherwise, except as required by applicable securities
legislation.
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SOURCE Canadian Utilities Limited