Strongest Quarter since Initial Public Offering Reduces Payout Ratio to
49%
/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE
SERVICES/
TORONTO, Nov. 14, 2014 /CNW/ - Crius Energy Trust (TSX: KWH.UN) ("Crius Energy" or the "Trust"), today announced its financial results
as at and for the period ended September 30, 2014. All figures in U.S.
dollars unless otherwise noted.
Q3 2014 Highlights
(All comparable metrics are to Q3 2013 except where noted)
-
Best quarterly performance since IPO in November of 2012 driven by
improved operational effectiveness and strong commodity margins
-
$37.9 million in gross margin or 24.5% of revenue, compared to $30.0
million or 20.6% of revenue, despite energy consumption being lower
than historical averages
-
$15.2 million in Adjusted EBITDA, a 44.8% increase over $10.5 million
-
49% payout ratio, compared to 102% in Q3 2013 and 67.5% in Q2 2014
-
Continued rapid growth in residential solar energy offering
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$2.0 million in solar energy revenue, up 18% from Q2 2014
-
Solar energy products contributed $1.4 million to Adjusted EBITDA, a 55%
increase over $0.9 million in Q2 2014
-
Customer attrition rates continued to normalize following impact of
polar vortex in Q1 2014
-
Customer drops were lower by 8.5% and 28.9% than in each of the previous
two quarters as a result of the Company focusing on providing
long-term, fixed rate products and continued investment in technology
and process to enhance the customer experience
-
580,363 customers at the end of the quarter
-
Strengthened financial capability to support distributions and long-term
growth
-
$58.1 million of total cash and availability at the end of the quarter,
compared to $46.1 million at June 30, 2014 and $33.9 million at
September 30, 2013
-
$6.5 million in distributions paid in the quarter
-
Q3 2014 cash availability consists of $10.4 million of cash and cash
equivalents and $47.7 million of availability under the credit facility
with Macquarie Energy LLC
"Despite lower than typical electricity volumes in the quarter, sound
risk management processes and improved operational effectiveness
enabled Crius to deliver our best performance since IPO," said Michael
Fallquist, CEO of Crius Energy Trust. "We believe our second
consecutive strong quarterly result, highlighted by strong operating
cash flows and a payout ratio of 49%, firmly demonstrates our ability
to deliver long-term sustainable distributions."
Review of Quarterly Results
Crius Energy Trust delivered its best quarterly performance since IPO
and its second consecutive quarter of strong financial results, driven
by commodity margins and continued operational improvements as a result
of ongoing investment in people, process and technology.
These operational improvements, particularly with regards to risk
management, contributed to the Company's record performance amidst
lower than normal summer energy usage. Cooler-than-normal temperatures
reduced the cooling load on the electrical grid, which typically peaks
in the summer months of July and August. During those months, Cooling
Degree Days were 19% lower than the 10-year average in markets served
by the Company. Through this period, the Company was able to
pro-actively manage its energy supply portfolio such that it
effectively mitigated pricing and volumetric risk.
Crius Energy also continued with its strategy to minimize customer
attrition and improve long-term customer value by spreading increased
wholesale energy costs incurred in the first quarter to customers over
multiple quarters. Electricity margins were $26.73 per MWh, compared to
$19.26 per MWh in the third quarter of 2013, reflecting both the
staggered pass-through strategy as well as effective management of the
wholesale supply book. Natural gas margin was $1.89 per MMBtu in the
third quarter of 2014 compared to a loss of $0.02 per MMBtu in the
third quarter of 2013. Total gross margin increased to $37.9 million or
24.5% percent of revenue, compared to $30.0 million or 20.6% in the
third quarter of 2013.
Adjusted EBITDA increased by 44.8% to $15.2 million, compared to $10.5
million reported in the third quarter of 2013 and the highest since the
Company's IPO. Payout ratio in the quarter was 49% (on an Adjusted
EBITDA less cash financing costs and cash taxes basis) an improvement
from 102% a year earlier and 67.5% in the second quarter of 2014.
Revenue from the Company's residential solar offering continued its
rapid growth, increasing by 18% to $2.0 million in the third quarter of
2014, from $0.1 million in the third quarter of 2013 and $1.7 million
for the second quarter of 2014. Solar energy is a high margin product
offering for the Company, with the business contributing a net margin
of $1.4 million in the quarter, a 56% increase over the $0.9 million
contributed in the second quarter of 2014.
Operating cash flows in the quarter strengthened the Company's financial
capability. Total cash and cash availability increased to $58.1 million
at the end of the quarter from $46.1 million at June 30, 2014 and $33.9
million at September 30, 2013, while total distributions paid during
the quarter were $6.5 million. Cash and cash availability consisted of
$10.4 million in cash and cash equivalents, no long term debt and $47.7
million available under the credit facility.
As anticipated by Management, customer attrition continued to normalize
in the quarter following elevated levels caused by increased prices
received by consumers as a result of the polar vortex. Customer drops
in Q3 2014 were 8.5% less than the second quarter of 2014 and 28.9%
lower than the first quarter of 2014. However, on a net basis, the
Company's customers declined by 3.3% to 580,363 compared to the
previous quarter.
The Trust's consolidated financial statements as at and for the period
ended September 30, 2014 and accompanying management's discussion and
analysis ("MD&A") have been filed with the securities regulators and
are available via SEDAR at www.sedar.com and are available on the Trust's website at www.criusenergytrust.ca.
Conference Call Notice
The Trust will hold a conference call to discuss its third quarter 2014
financial results today, November 14, 2014 at 8:30 a.m. ET.
To access the conference call by telephone, dial 647-427-7450 or
1-888-231-8191. Please connect approximately 15 minutes prior to the
beginning of the call to ensure participation. A question and answer
session for analysts will follow management's presentation.
A live audio webcast of the conference call will be available at www.cnw.ca. Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
join the webcast. The webcast will be archived at the above web site
for 30 days.
A taped rebroadcast will be available to listeners until 11:59 p.m. EDT
on November 21, 2014. To access the rebroadcast, please dial
416-849-0833 or 1-855-859-2056 and enter passcode 21485208, followed by
the number sign.
About Crius Energy
Crius Energy Trust was established to provide investors with a
distribution-producing investment through the acquisition of a 26.8%
ownership interest in Crius Energy. With approximately 600,000
residential customer equivalents, Crius Energy is a comprehensive
energy solutions partner that provides electricity, natural gas and
solar products to residential and commercial customers. Crius Energy
connects with energy customers through an innovative family-of-brands
strategy and multi-channel marketing approach. This unique combination
creates multiple access points to a broad suite of energy products and
services that make it easier for consumers to make informed decisions
about their energy needs. Crius Energy currently sells energy products
in 19 states and the District of Columbia with plans to continue
expanding its geographic reach.
Crius Energy Trust intends to continue to qualify as a "mutual fund
trust" under the Income Tax Act (Canada) (the "Tax Act"). The Trust will not be a "SIFT trust" (as
defined in the Tax Act), provided that the Trust complies at all times
with its investment restriction which precludes the Trust from holding
any "non-portfolio property" (as defined in the Tax Act). Material
information pertaining to Crius Energy may be found on www.sedar.com or www.criusenergytrust.ca.
Caution Regarding Forward-Looking Statements
This news release contains forward-looking information that involves
substantial known and unknown risks and uncertainties, most of which
are beyond the control of Crius Energy, including, without limitation,
those listed under "Risk Factors" and "Forward-Looking Statements" in
Crius Energy's Annual Information Form dated March 26, 2014
(collectively, "forward-looking information"). Forward-looking
information in this news release includes, but is not limited to, Crius
Energy's objectives and status as a mutual fund trust and not a SIFT
trust, results of operations, financial position or cash flows,
customer revenues and margins, customer additions and renewals,
customer attrition, customer consumption levels, general and
administrative expenses, treatment under governmental regulatory
regimes, distributable cash and Crius Energy's expectations and
estimates regarding the payment of distributions to unitholders. Crius
Energy cautions investors of Crius Energy's securities about important
factors that could cause Crius Energy's actual results to differ
materially from those projected in any forward-looking statements
included in this news release. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical facts
and may be forward-looking and may involve estimates, assumptions and
uncertainties which could cause actual results or outcomes to differ
materially from those expressed in such forward-looking statements. No
assurance can be given that the expectations set out in this news
release will prove to be correct and accordingly, prospective investors
should not place undue reliance on these forward-looking statements.
These statements speak only as of the date of this news release and
Crius Energy does not assume any obligation to update or revise them to
reflect new events or circumstances.
SOURCE Crius Energy Trust
