Emera (TSX:EMA) today reported results for the first quarter of
2015.
Financial Highlights:
Adjusted Earnings (excluding after-tax mark-to-market impacts)
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Adjusted earnings per share(1) increased 15% in Q1 2015 to
$1.18 (Q1 2014: $1.03).
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Adjusted net income(1) increased 17% to $171.6 million in
Q1 2015 (Q1 2014: $146.6 million).
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Includes $11.5 million after-tax gain ($0.08 per common share) on the
sale of 49% interest in Northeast Wind Partnership II, LLC (NWP).
Adjusted earnings per share(1) in Q1 2015 further adjusted
to exclude the gain on the sale of 49% interest in NWP results in
earnings per share of $1.10.
Earnings (including after-tax mark-to-market impacts)
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Earnings per share decreased 23% in Q1 2015 to $1.10 (Q1 2014: $1.43).
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Net income decreased 21% in Q1 2015 to $160.1 million (Q1 2014: $202.8
million).
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Includes after-tax mark-to-market losses of $(11.5) million or $(0.08)
per common share (Q1 2014, after-tax mark-to-market gains of $56.2
million or $0.40 per common share).
Revenues & Cash Flows
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Operating revenues decreased 14% to $900.3 million in Q1 2015 (Q1
2014: $1,050.3 million).
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Cash flow from operations decreased 24% to $110.7 million in Q1
2015 (Q1 2014: $146.4 million).
“Emera had a strong start to the year, with record first quarter
adjusted earnings, driven by growth in every segment of the business,”
said Chris Huskilson, President and CEO of Emera Inc. “This growth was
led by the performance of our New England gas plants. These positive
results, together with improved visibility of our earnings from the
Maritime Link project, reinforce our continued confidence in delivering
our growth targets.”
Consolidated Financial Highlights (in millions
of $CAD, except per share amounts)
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Q1 2015
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Q1 2014
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Operating revenues
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$900.3
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$1,050.3
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Adjusted EBITDA(1)*
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$384.2
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$331.0
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Net income attributable to common shareholders
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$160.1
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$202.8
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After-tax mark-to-market gain (loss)
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($11.5)
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$56.2
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Adjusted net income attributable to common shareholders(1)*
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$171.6
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$146.6
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Earnings per common share - basic
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$1.10
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$1.43
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Adjusted earnings per common share - basic(1)*
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$1.18
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$1.03
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Dividends per common share declared
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$0.3875
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$0.3625
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Total Assets (as at March 31st)
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$10,191.7
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$9,290.4
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Weighted average shares of common stock outstanding - basic
(millions of shares for the three months ended March 31st
)
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144.9
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142.0
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*Adjusted EBITDA(1), Adjusted net
income(1) and Adjusted earnings per common share(1)
excludes the effect of after-tax mark-to-market adjustments.
Operating revenues decreased 14.3% to $900.3 million in Q1 2015
compared to the same quarter last year. The decrease was primarily due
to mark-to-market impacts and reduced trading and marketing revenue due
to very strong market conditions in northern United States and Ontario
in Q1 2014. The decrease was partially offset by increased revenues at
Nova Scotia Power as a result of recovery of prior years’ fuel costs and
load growth.
Cash Flow from operations decreased 24% to $110.7 million in Q1
2015 compared to $146.4 million in Q1 2014. The decrease was primarily
due to lower trading and marketing margin and increased investment in
non-cash working capital largely from higher posted margin in support of
Emera Energy’s business, as well as from the timing of accounts payable,
partially offset by higher margins at the New England gas generating
facilities.
Adjusted net income(1) increased $25.0 million to
$171.6 million in Q1 2015 compared to Q1 2014. The expected reduction in
Emera Energy’s trading and marketing contribution was more than fully
offset by the increased contributions from Emera Energy’s New England
gas generation facilities, the gain on the sale of Northeast Wind
Partners and the positive impact of a strong USD.
After-tax mark-to-market losses of $(11.5) million or $(0.08) per
common share in Q1 2015 compared to mark-to-market gains of $56.2
million or $0.40 per common share in Q1 2014. The decrease is primarily
due to the reversal of 2013 mark-to-market losses in 2014 and changes in
gas and power contract positions.
Items Impacting the Quarter
Sale of Northeast Wind Partnership II, LLC Equity Investment
On January 29, 2015, Emera completed the sale of its 49 per cent
interest in NWP for $282.3 million ($223.3 million USD). This sale
resulted in a pre-tax gain of $18.6 million or $0.13 per common share
(after-tax gain of $11.5 million or $0.08 per common share).
Segmented Results
Emera reports its results in six operating segments: Nova Scotia Power,
Emera Maine, Emera Caribbean, Pipelines, Emera Energy, and Corporate and
Other.
Quarterly Segmented Results (in millions of
$CAD, except per share amounts)
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Adjusted Net Income(1)
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Q1 2015
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Q1 2014
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Nova Scotia Power Inc.
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$68.0
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$66.8
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Emera Maine
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$11.5
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$10.4
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Emera Caribbean
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$8.8
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$6.6
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Pipelines
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$9.9
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$7.2
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Emera Energy*
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$76.4
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$61.0
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Corporate and Other
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($3.0)
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($5.4)
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TOTAL
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$171.6
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$146.6
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Adjusted EPS (basic)(1)
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$1.18
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$1.03
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*Adjusted net income(1) includes a one-time $11.5
million gain on the sale of NWP and excludes after-tax mark-to-market
loss of $11.5 million (Q1 2014, after-tax mark-to-market gain of $56.2
million).
Nova Scotia Power Inc.’s net income was $68.0 million in Q1 2015,
an increase of $1.2 million from the $66.8 million in Q1 2014. The
increase is primarily attributable to the timing of regulatory deferrals
and increased electricity sales partly due to the weather, partially
offset by increased tax expense related to pension contributions and
increased income before provision for income taxes.
Emera Maine contributed $11.5 million to consolidated net income
in Q1 2015, an increase of $1.1 million compared to Q1 2014 net income
of $10.4 million. The higher net income was primarily from the impact of
a stronger USD.
Emera Caribbean’s net income of $8.8 million in Q1 2015
represents an increase of $2.2 million compared to Q1 2014 net income of
$6.6 million. The higher net income was primarily due to decreased OM&G
expense and the positive impact of the stronger USD.
Pipelines contributed $9.9 million to consolidated net income in
Q1 2015, an increase of 38% compared to $7.2 million in Q1 2014. The
increase is primarily attributable to higher equity earnings from
Maritimes & Northeast Pipeline due to increased interruptible
transmission revenue, increased tolls and stronger USD.
Emera Energy’s net income, adjusted to exclude after-tax
mark-to-market impacts, increased $15.4 million to $76.4 million in Q1
2015 from $61.0 million in the same quarter last year. The increase in
adjusted net income(1) was primarily due to increased
contributions from the New England gas generating facilities and the
gain on the sale of the NWP investment, partially offset by decreased
trading and marketing margins.
Corporate and Other recorded a net loss of $3.0 million in Q1
2015 compared to a loss of $5.4 million in Q1 2014. The improved results
were primarily due to increased equity earnings from APUC and NSPML,
partially offset by increased preferred share dividends as a result of a
share issuance in Q2 2014.
(1) Non-GAAP Measures
Emera uses financial measures that do not have standardized meaning
under USGAAP and may not be comparable to similar measures presented by
other entities. Emera calculates the non-GAAP measures by adjusting
certain GAAP and non-GAAP measures for specific items the Company
believes are significant, but not reflective of underlying operations in
the period. Refer to the Non-GAAP Financial Measures section of our
Management's Discussion and Analysis ("MD&A") for further discussion of
these items.
Forward Looking Information
This news release contains forward looking information. Actual future
results may differ materially. Additional information related to Emera,
including the company’s Annual Information Form, can be found on SEDAR
at www.sedar.com.
Teleconference Call
The company will be hosting a teleconference Monday, May 11, 2015 at
11:00am Atlantic time (10:00am Toronto/Montreal/New York; 9:00am
Winnipeg; 8:00am Calgary; 7:00am Vancouver) to discuss the Q1 2015
financial results.
Analysts and other interested parties in North America wanting to
participate in the call should dial 1 (888) 241-0551 at least 10 minutes
prior to the start of the call. International participants wanting to
participate should dial (647) 427-3415. No pass code is required. The
teleconference will be recorded. If you are unable to join the
teleconference live, you can dial for playback, toll-free at
1-855-859-2056. The Conference ID is 26905812 (available until midnight,
May 28, 2015).
The teleconference will also be web cast live at emera.com
and available for playback for one year.
About Emera
Emera Inc. is geographically diverse energy and services company
headquartered in Halifax, Nova Scotia with $10.19 billion in assets and
2014 revenues of $2.97 billion. The company invests in electricity
generation, transmission and distribution, as well as gas transmission
and utility energy services. Emera's strategy is focused on the
transformation of the electricity industry to cleaner generation and the
delivery of that clean energy to market. Emera has investments
throughout northeastern North America, and in four Caribbean countries.
Emera continues to target having 75-85% of its adjusted earnings come
from rate-regulated businesses. Emera common and preferred shares are
listed on the Toronto Stock Exchange and trade under the symbols EMA,
EMA.PR.A, EMA.PR.C, EMA.PR.E, and EMA.PR.F. Additional Information can
be accessed at www.emera.com
or at www.sedar.com.
Copyright Business Wire 2015