CALGARY, May 1, 2020 /CNW/ - ATCO Ltd. (TSX: ACO.X,
ACO.Y)
ATCO today announced first quarter 2020 adjusted earnings of
$106 million, or $0.93 per share, compared to $112 million, or $0.98 per share, in the first quarter of
2019.
Lower adjusted earnings in the first quarter of 2020 were mainly
due to the sale of the Canadian fossil fuel-based electricity
generation portfolio in the third quarter of 2019 and the sale of
Alberta PowerLine in the fourth
quarter of 2019.
Excluding the forgone earnings impact from these business sales
in 2019, adjusted earnings in the first quarter of 2020 were
$10 million higher than the same
period in 2019. Higher earnings were mainly due to continued work
on ATCO Structures' LNG Canada Cedar Valley Lodge contract and
higher contributions from Canadian Utilities mainly due to
continuing cost efficiencies, utility rate base growth and lower
income taxes.
COVID-19 AND GLOBAL MACROECONOMIC CONDITIONS
The COVID-19 pandemic, oil price decline and slowing global
economic activity have caused far-reaching concern and economic
hardship for consumers, businesses and communities across the
globe.
"ATCO activated our Pandemic Response Plan in February 2020, rapidly ensuring the health and
safety of our employees and our customers," said Nancy Southern, CEO & Chair, ATCO. "Across
all our global operations, the people of ATCO have continued to
deliver our essential products and services to our customers, and
the communities we serve. I am so very proud of their commitment
and resilience in these challenging times."
Please see management's discussion and analysis for the quarter
ended March 31, 2020 for a summary of
the impact of these factors on ATCO's businesses.
RECENT DEVELOPMENTS
ATCO Structures
- Began the manufacturing and installation work on a 12-dorm,
444-person expansion of the BC Hydro Site C Two Rivers Lodge. The
additional rooms are anticipated to be handed over by June 1, 2020 and will contribute $25 million in installation and rental revenue
during the 12-month contract term.
- Added two permanent modular construction contracts. Began
construction of a $9 million, 44-unit
apartment building in New Westminster,
BC as part of the Government of BC's program to provide
affordable housing to low income individuals and families across
the province. Awarded a $5 million
contract to design, manufacture and install three permanent modular
classrooms in Melbourne, Australia
with the Victoria Department of Education.
Canadian Utilities
- Completed and placed in-service the Pembina-Keephills transmission pipeline ahead of
schedule and below the $230 million
approved budget. The 59-km high-pressure natural gas pipeline
supports coal-to-gas conversion of power producers in the Genesee
and surrounding areas of Alberta with the capacity to deliver up to
550-TJ per day.
Corporate
- On March 31, 2020 ATCO declared a
second quarter dividend for 2020 of 43.52
cents per share or $1.74 per
Class I Non-Voting and Class II Voting Share on an annualized
basis.
FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED
EARNINGS
A financial summary of the consolidated subsidiaries of ATCO and
a reconciliation of adjusted earnings to earnings attributable to
Class I and Class II Shares is provided below:
|
For the Three
Months
Ended March 31
|
($ millions except
share data)
|
2020
|
2019
|
Consolidated adjusted
earnings (1)
|
106
|
112
|
Unrealized gains on
mark-to-market forward and swap commodity contracts
(2)
|
3
|
3
|
Rate-regulated
activities (2)
|
(17)
|
(3)
|
IT Common Matters
decision (2)
|
(2)
|
—
|
Other
(3)
|
(3)
|
—
|
Earnings attributable
to Class I and Class II Shares
|
87
|
112
|
Weighted average
shares outstanding (millions of shares)
|
114.4
|
114.3
|
|
|
(1)
|
Adjusted earnings
are earnings attributable to Class I and Class II Shares after
adjusting for the timing of revenues and expenses associated with
rate-regulated activities and unrealized gains or losses on
mark-to-market forward and swap commodity contracts. Adjusted
earnings also exclude one-time gains and losses, significant
impairments, and items that are not in the normal course of
business or a result of day-to-day operations. Adjusted earnings
present earnings on the same basis as was used prior to adopting
International Financial Reporting Standards (IFRS) - that basis
being the U.S. accounting principles for rate-regulated entities -
and they are a key measure used to assess segment performance, to
reflect the economics of rate regulation and to facilitate
comparability of ATCO's earnings with other Canadian rate-regulated
companies.
|
(2)
|
Refer to Note 3 of
the Unaudited Interim Consolidated Financial Statements for the
three months ended March 31, 2020 for detailed descriptions of this
adjustment and others.
|
(3)
|
Each quarter, the
Company adjusts the deferred tax asset which was recognized as a
result of the Tula Pipeline Project impairment. The adjustment is
due to a difference between the tax base currency, which is the
Mexican peso, and the U.S. dollar functional
currency.
|
This news release should be used as preparation for reading the
full disclosure documents. ATCO's consolidated financial statements
and management's discussion and analysis for the quarter ended
March 31, 2020 will be available on
the ATCO website (www.ATCO.com), via SEDAR (www.sedar.com) or can
be requested from the Company.
With approximately 6,500 employees and assets of $22 billion, ATCO is a diversified global
corporation with investments in the essential services of
Structures & Logistics (workforce and residential housing,
innovative modular facilities, construction, site support services,
workforce lodging services, facility operations and maintenance,
defence operations services, and disaster and emergency management
services); Utilities (electricity and natural gas transmission and
distribution); Energy Infrastructure (electricity generation,
energy storage and industrial water solutions); Retail Energy
(electricity and natural gas retail sales); Transportation (ports
and transportation logistics); and Commercial Real
Estate. More information can be found at
www.ATCO.com.
Investor & Analyst Inquiries:
D.A. (Dennis) DeChamplain
Executive Vice President & Chief Financial Officer
T: 403-292-7502
Media Inquiries:
Kurt Kadatz
Senior Manager, Corporate Communications
T: 587-228-4571
Forward-Looking Information:
Certain
statements contained in this news release may 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", and similar expressions.
Forward-looking information involves 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 information.
The Company's actual results could differ materially from
those anticipated in this forward-looking information as a result
of 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), and other
factors, many of which are beyond the control of the
Company.
The Company believes that the expectations reflected in the
forward-looking information are reasonable, but no assurance can be
given that these expectations will prove to be correct and such
forward-looking information should not be unduly relied
upon.
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.
SOURCE ATCO Ltd.