Management’s Discussions and Analysis
Net Finance Expenses Net finance expenses for 2025 were only slightly higher than in 2024. Although a loss was realized on the redemption of a debt retirement fund used to extinguish a long-term debt maturity during the period, interest rates have declined year-over- year, almost fully offsetting the one-time loss. The debt-to-equity ratio at December 31, 2025, is 61.5 per cent, which falls within the long-term target range of 58 to 63 per cent debt.
Other Net Losses
The Corporation reported other net losses of $6 million for the nine months ended December 31, 2025, which represents a $4 million increase compared to the $2 million recorded in the same period in 2024. This rise is primarily attributed to net losses realized on asset retirements, as well as write-offs related to the impairment and cancellation of a system enhancement project. Liquidity and Capital Resources As a Crown corporation, 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 its 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 $50 million line of credit with the Toronto-Dominion Bank. Within this line of credit, the Corporation provides a $20 million letter of credit with ICE NGX as security for natural gas purchases and sales conducted by the Corporation of the ICE NGX natural gas exchange in Alberta, leaving $30 million uncommitted. 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)
2025
2024
Change
2025
2024
Change
Cash provided by operating activities Cash (used in) investing activities
$
53
$
87
$
(34)
$
141 $
226
$
(85) ( 85)
(115)
(106)
(9)
(300)
(215)
Cash provided by (used in) financing activities Increase (decrease) in cash and cash equivalents
103
18
85 42
199
( 30) (19)
229
$
41
$
(1)
$
$
40
$
$
59
Operating Activities Cash provided by operating activities decreased $85 million through the nine months ended December 31, 2025, compared to the same period in 2024, primarily due to unfavourable changes in working capital offsetting the positive operating results. High short-term liability balances were paid down during the fiscal year, particularly in the first quarter, which more than offset the positive cash flow from asset optimization activities and customer capital contributions. Investing Activities Cash used in investing activities increased $85 million compared to 2024, primarily due to major capital investments in customer growth projects. Financing Activities Cash provided by financing activities increased by $229 million for the nine months ended December 31, 2025, compared to the same period in 2024. The increase primarily reflects greater reliance on short-term debt at comparatively lower interest rates to support operating requirements through the winter heating season. Financing inflows were also temporarily impacted by the unintentional receipt of excess funds during the rollover of the Corporation’s line of credit. The issue was promptly resolved immediately after the reporting date, returning cash balances to levels consistent with seasonal expectations.
9
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