Management’s Discussion and Analysis
30
Consolidated Financial Results Consolidated Net Income (millions) Income before unrealized market value adjustments
March 31, 2026
March 31, 2025
Change
$
96 $
82 $
14
(12)
Impact of fair value adjustments
8
(20)
$
84 $
Consolidated net income
90 $
(6)
Income before unrealized market value adjustments was $96 million in 2025-26, which is $14 million higher than the $82 million recorded in 2024-25. This improvement is primarily attributed to year-over-year increases in customer capital contributions and higher asset optimization margins, as well as increases in transportation revenues. These gains were partially offset by increased operating and maintenance expenses, as new technology implementation costs, software lease and maintenance costs, and third- party transportation costs were higher year over year. Employee benefit costs, as well as depreciation and amortization expenses, were also higher than the prior year and had an offsetting impact on the favourable results. The Corporation’s results in each revenue, margin and expense area are discussed in more detail in the respective sections of the MD&A. Fair value adjustments on natural gas contracts are impacted by changes in the volume of natural gas contracts outstanding and the difference between contract and market prices. Forward natural gas prices at March 31, 2026, declined far below March 2025 levels, resulting in a $12 million unfavourable fair value adjustment. This is primarily due to a widening negative price differential between the average deal price and the average market price on outstanding purchase contracts. The negative differential on commodity purchases increased by $0.68 per GJ, and the negative differential on asset optimization purchases increased by $0.19 per GJ compared to March 31, 2025. The price differential on asset optimization sales improved by $0.21 per GJ compared to March 31, 2025, which had a $3 million offsetting impact to the unfavourable adjustment from purchase contracts of $15 million.
Consolidated Financial Results
CONSOLIDATED FINANCIAL RESULTS
$180
$160
$140
$120
$100
$80
$60
$40
$20
$0
2021-22
2022-23
2023-24
2024-25
2025-26
Income before unrealized market value adjustments Consolidated net income
Natural Gas Sales and Purchases Natural gas sales and purchases include rate-regulated commodity sales to distribution customers and non- regulated asset optimization activities. Although IFRS Accounting Standards requires these activities to be presented together in the consolidated financial statements, the Corporation manages them as distinct and separate businesses. Therefore, the MD&A addresses these natural gas sales and purchases separately. IFRS Accounting Standards mandates that derivative instruments, such as natural gas purchase and sales contracts, be recorded at fair value until their settlement date, except for contracts entered into for an entity’s normal usage. Changes in the fair value of these instruments, driven by fluctuations in future natural gas prices, are recorded in net income through natural gas sales or purchases, depending on the specific contract. Upon settlement, the amount paid or received by SaskEnergy becomes realized and recorded in natural gas sales or purchases. Most of SaskEnergy’s natural gas contracts are for normal usage and are recorded at the contract price upon settlement.
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