Management’s Discussion and Analysis
The debt-to-equity ratio at December 31, 2024, is 60 per cent, which falls within the long-term target range of 58 to 63 per cent debt. Liquidity and Capital Resources SaskEnergy’s primary sources of capital are cash from operations and debt — which is borrowed through the Province’s General Revenue Fund. Cash from operations is SaskEnergy’s most important source of capital. As a utility, cash from operations is relatively stable and the Corporation relies on it to fund a significant proportion of its investment in natural gas facilities, and the debt servicing costs on those investments. Long- and short-term debt can be borrowed through the Province of Saskatchewan to meet any long- or short-term incremental capital requirements, and to repay debt as it matures. Sources of liquidity include Order in Council authority to borrow up to $500 million in short-term loans, and a $35 million line of credit with the Toronto-Dominion Bank. Under The SaskEnergy Act, the Corporation may borrow up to $2,500 million of debt upon approval of the Lieutenant Governor in Council.
Three months ended December 31,
Nine months ended December 31,
(millions)
2024
2023 Change 2024
2023 Change
$
87
$
226 $
Cash provided by operating activities Cash used in investing activities
$
67
$
20
209
$
17
(106)
(215)
(85)
(21)
( 196)
(19) (11) (13)
18
(30) (19)
Cash (used in) provided by financing activities Decrease in cash and cash equivalents
14
4 3
(19)
$
$
(1)
$
(6)
$
$
(4)
$
Operating Activities Cash provided by operating activities increased by $17 million for the nine months ended December 31, 2024, compared to the same period in 2023. This increase was driven by higher customer demand combined with the impact of rate increases for both distribution and transmission natural gas services, which were implemented to address rising costs and expansion of the Corporation’s natural gas system. Increasing customer capital contributions through 2024 compared to 2023 in the distribution utility also contributed to the favourable cash flows. These favourable results were partially offset by higher employee benefit costs and higher operating and maintenance expenses. Employee benefit costs grew in 2024, due to the implementation of the new Collective Bargaining Agreement, salary increases and full-time equivalents trending higher due to the Corporation filling previously vacant positions. Operating and maintenance expenses increased as third-party transportation expenses increased to serve customers, combined with additional energy efficiency rebates paid to customers. Investing Activities Cash used in investing activities increased $19 million compared to 2023, primarily due to the Corporation continuing to expand investment related to safety, system integrity and growing infrastructure. Financing Activities Cash used in financing activities grew $11 million in 2024 compared to 2023, primarily due to the Corporation paying a long-term debt maturity of $100 million in 2024, as well as paying $34 million to reduce short-term debt, $69 million for interest payments and $14 million for dividend payments. During the first half of fiscal 2024-25, the Corporation borrowed an additional $200 million of long-term debt at a discount of $5 million. Capital Additions Capital additions, as reported in the condensed consolidated financial statements, were as follows:
Three months ended December 31,
Nine months ended December 31,
(millions)
2024
2023 Change 2024
2023 Change
$
25 26 33 10
$
52 49 73 19
Customer growth System expansion Risk management
$
20 18 23 16
$
5 8
$
41 49 64 29
$
11
-
10
9
Reliability of natural gas service
(6)
(10)
2
6
Business and technology optimization
2
-
5
1
$
96
$
199 $
Capital additions
$
79
$
17
188
$
11
12
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