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EPCOR Utilities Inc.
EPCOR Announces 2016 Financial Results



March 3, 2017

EPCOR Utilities Inc. (EPCOR) filed its annual and fourth quarter results for 2016.

"2016 was a defining year for EPCOR with consolidated net income at the highest in a decade reaching $309 million. This, in part, reflected a gain on the sale of EPCOR's remaining ownership interest in Capital Power Corporation," said Stuart Lee, EPCOR President & CEO.

"As well, EPCOR entered Texas with its investment in the 130 Pipeline, a water supply pipeline, near Austin and is set to re-enter the Ontario market with the pending acquisition of the assets of Natural Resource Gas Limited utility in southwestern Ontario. EPCOR also reached substantial completion of the City of Regina's upgraded wastewater treatment plant - on time and on budget. EPCOR will operate and finance the new infrastructure under a 30-year contract with the City."

Backed by a strong and sustainable long-term growth outlook, EPCOR increased its annual dividend to its Shareholder, the City of Edmonton, by $5 million to $146 million commencing in 2017.

"In addition to a strong growth outlook and excellent financial results, EPCOR recorded its best safety performance and highest employee engagement scores in company history. These results were among the most gratifying of the year," said Mr. Lee.

Highlights of EPCOR's financial performance are as follows:

  • Net income was $88 million and $309 million for the three and twelve months ended December 31, 2016, respectively, compared with net income of $65 million and $260 million for the corresponding periods in the previous year. Net income was higher for the three months ended December 31, 2016, primarily due to gains resulting from the sale of Capital Power shares and greater favorable fair value adjustments related to financial electricity purchase contracts and interest rate swaps, partially offset by lower income from core operations, as described below. Net income was higher for the twelve months ended December 31, 2016, primarily due to gains resulting from the sale of Capital Power shares, greater favorable fair value adjustments related to financial electricity purchase contracts and higher income from core operations, as described below.
  • Income from core operations was $51 million and $255 million for the three and twelve months ended December 31, 2016, respectively, compared with $74 million and $251 million for the corresponding periods in the previous year. Income from core operations was lower for the three months ended December 31, 2016, primarily due to lower transmission customer rates, lower billing charge rates, higher depreciation, and lower income related to industrial services contracts, partially offset by higher approved distribution and water customer rates. Income from core operations was higher for the twelve months ended December 31, 2016, primarily due to higher approved distribution, transmission and water customer rates, gains on sale of surplus land, and growth in the number of water customers, partially offset by higher depreciation, lower billing charge rates and lower water volumes in Canada due to higher precipitation.
  • Net cash flows from operating activities was $109 million for the three months ended December 31, 2016, compared with $112 million for the corresponding period in the previous year. The small decrease reflects lower funds from operations offset by higher funds from the change in non-cash operating working capital. Net cash flows from operating activities was $475 million for the twelve months ended December 31, 2016, compared with $416 million for the corresponding period in the previous year. The increase of $59 million was due to higher funds from the change in non-cash operating working capital, partially offset by lower funds from operations.
  • Investment in capital projects was $161 million and $553 million for the three and twelve months ended December 31, 2016, respectively, compared with $137 million and $463 million for the corresponding periods in the previous year. The year-to-date increase of $90 million was primarily due to the acquisition of the 130 Pipeline and increased spending in the Distribution and Transmission segment on the Advanced Meter Infrastructure Project and the Work Centre Redevelopment Project.

Management's discussion and analysis (MD&A) of the annual and fourth quarter results are shown below. The MD&A and the audited annual consolidated financial statements are available on EPCOR's website (www.epcor.com) and SEDAR (www.sedar.com).

EPCOR's wholly owned subsidiaries build, own and operate electrical transmission and distribution networks, water and wastewater treatment facilities and infrastructure in Canada and the United States. The Company's subsidiaries also provide 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.

Click here to read the full press release.

For more information:

Organization:
EPCOR Utilities Inc.

Address:
10065 Jasper Ave
Edmonton, Alberta
Canada, T5J 3B1
www.epcor.ca
Tel: 780-412-3414


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