Financial and Operating Highlights
Quarterly Year-Over-Year Analysis Operating results generally vary from quarter to quarter as a result of changes in general economic conditions and seasonal fluctuations. Results in one quarter are not necessarily indicative of how the Corporation will perform in a future quarter. Natural gas consumption has unique seasonal aspects as customers typically use natural gas as heating fuel during cold winter months through the third and fourth quarters. First Quarter (three months ending June 30)
Third Quarter (three months ending December 31) Income before unrealized market value
Income before unrealized market value adjustments was $nil in 2023, $3 million unfavourable compared to net income of $3 million in 2022. This primarily resulted from lower asset optimization margins, as lower natural gas market prices and less market volatility limited the Corporation’s asset optimization opportunities. In addition, hosting fees increased in 2023 to support the additional functionality implemented relating to the customer Online Account. Higher transportation and storage expenses also contributed to the unfavourable results as third-party transportation service providers implemented rate increases. Further, short-term debt financing costs increased as short-term interest rates continued to rise. These unfavourable impacts were partially offset by a higher commodity margin in 2023, a result of natural gas market prices that significantly decreased the cost of gas relative to an August 2022 commodity rate increase. Second Quarter (three months ending September 30) A net loss of $14 million before unrealized market value adjustments in 2023 was $21 million unfavourable compared to net income of $7 million in 2022. The unfavourable impacts identified in the first quarter continued through the second quarter of 2023. The unfavourable quarter-over-quarter asset optimization margins in 2023 widened in the second quarter, as significant market opportunities available in 2022 remained absent in 2023. Modernizing technology solutions also contributed to higher costs in 2023.
adjustments was $28 million in the third quarter of 2023, $34 million unfavourable compared to income of $62 million in 2022. Unusually warm weather through the third quarter of 2023 — 27 per cent warmer than 2022 — significantly reduced delivery revenue and commodity margins. A commodity rate decrease to $3.20 per gigajoule effective October 1, 2023 also contributed to lower commodity margins in the current year, which was partially offset by the favourable impact of lower market prices resulting in lower cost of gas sold in 2023. Asset optimization margins continued to decline in the third quarter, while higher leak survey, environmental monitoring and cathodic protection costs due to growing natural gas infrastructure contributed to the unfavourable results in 2023. In addition, vacant positions in 2022 were filled in 2023, contributing to higher employee benefit costs in 2023. Fourth Quarter (three months ending March 31) Income before unrealized market value adjustments was $41 million, $13 million unfavourable compared to income of $54 million in the final quarter of fiscal 2022-23. This is primarily due to a large transmission system project being finalized and the related customer capital contribution being recognized in 2022-23. In addition, employee benefits expenses were higher in 2023-24 as salary and wage increases were recognized in the fourth quarter. These were retroactive to earlier in the fiscal year and coincided with implementation of a new three-year Collective Bargaining Agreement.
20
Made with FlippingBook Ebook Creator