SaskEnergy Incorporated First Quarter Report
March 31, 2011
CONSOLIDATED FINANCIAL RESULTS
Consolidated Net Income
Three months ended December 31
Nine months ended December 31
(millions)
2017
2016 Change
2017
2016 Change
Income (Loss) before unrealized market value adjustments Impact of fair value adjustments Revaluation of natural gas in storage
$
58 10
$
45 13 13
$
13
$
57 14
$
35 69 27
$
22
(3)
(55) (34)
-
(13)
(7)
Consolidated net income (loss)
$
68
$
71
$
(3)
$
64
$
131
$
(67)
Net income before unrealized market value adjustments was $57 million for the nine months ended December 31, 2017, $22 million favourable compared to the $35 million net income in 2016, due primarily to the net reversal of a $15 million impairment taken on non-core storage assets. The non-core storage assets are transferring from a single cash generating unit, into a larger cash generating unit of storage assets, a result of changing corporate strategy. Other storage and processing assets remain impaired. In general, the long term market price of natural gas is trending a slight increase, which means that there are constrained price differentials between current and forward market prices and limited opportunities to use storage to generate gas marketing margins. This is resulting in the continued impairment of the remaining non-core storage, treatment, gathering and energy service assets. The Corporation may be able to take advantage of the TCPL mainline through diversions to other locations when capacity is underutilized which would extend the favourable gas marketing results through the last quarter. With respect to core operations, the delivery rate increases effective November 1, 2016, and November 1, 2017 combined with increased transportation loads will continue to contribute to higher delivery revenue compared to 2016. A large portion of SaskEnergy’s revenue is dependent on customer’s use of natural gas to heat their premises. Weather was 2 per cent colder than normal through the nine months ending December 31, 2017 compared to 8 per cent warmer than normal for the same period in 2016. This also contributed to higher delivery revenue. Both operating and maintenance, and depreciation have
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2017-18 THIRD QUARTER REPORT
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