Management’s Discussion and Analysis
Consolidated Financial Results Consolidated Net Income (millions) Income before unrealized market value adjustments
March 31, 2025
March 31, 2024
Change
$
82 $
55 $
27 42 69
8
Impact of fair value adjustments
(34)
$
90 $
Consolidated net income
21 $
Income before unrealized market value adjustments was $82 million in 2024-25, which is $27 million higher than the $55 million recorded in 2023-24. This improvement is primarily attributed to year-over-year increases in core delivery and transportation revenues, as well as higher asset optimization margins and customer capital contributions. These gains were partially offset by higher employee benefit costs and increased operating and maintenance expenses. Delivery revenue increased in 2024-25, primarily due to weather conditions being 10 per cent colder year-over- year. Specifically, November, December and February were significantly colder compared to the previous year. Additionally, rate adjustments were implemented late in October 2023, to address rising costs and ongoing investments related to safety, system integrity, and infrastructure expansion, providing increased revenue throughout the 2024-25 fiscal year. Transportation and storage revenues increased in 2024-25 compared to 2023-24. This growth was driven by higher intra-provincial delivery service revenues and a two per cent rate increase effective April 1, 2024, to support transmission system expansion and meet growing demand for natural gas services in Saskatchewan. Asset optimization margins were higher in the year as opportunities arose from the favourable price differential between AECO and other markets. The Corporation benefited by optimizing under-utilized transportation capacity during off-peak periods. Revenue from customer capital contributions for the 12 months ending March 31, 2025, increased as the demand for new customer facility connections rose. Employee benefit costs increased in 2025 due to the new Collective Bargaining Agreement implemented effective February 2024, which raised employee compensation. The Corporation also filled previously vacant construction, engineering and digital and technology positions to meet growing customer demand and support innovation. These increasing costs were partially offset by higher labour costs allocated to capital projects in 2024-25 compared to 2023-24.
Operating costs also increased compared to the 2023-24 fiscal year, primarily due to higher third-party transportation service costs and increased operating expenses for digital technology as the organization is transitioning to cloud computing arrangements for software services. Additionally, costs associated with customer specific facility modifications and an increase in the Corporation’s energy efficiency programs supporting costs contributed to the operating and maintenance expense increase in 2024-25. At March 31, 2025, the fair value adjustment on commodity derivative instruments increased consolidated net income. AECO market prices at March 31, 2025, were approximately half of 2023-24 prices, significantly improving the price differential between the average contract and market price on the commodity purchase contracts outstanding at March 31, 2025.
Consolidated Financial Results
CONSOLIDATED FINANCIAL RESULTS
$180
$160
$140
$120
$100
$80
$60
$40
$20
$0
2020-21
2021-22
2022-23
2023-24
2024-25
Income before unrealized market value adjustments Consolidated net income
33
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