SaskEnergy Incorporated First Quarter Report
March 31, 2011
AECO Monthly Index Historical Prices
$14.00
Conventional Natural Gas
$12.00
$10.00
$8.00
Shale Gas Revolution
$6.00
Forward Price at Sept. 30, 2017
$4.00
$2.00
$0.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
CONSOLIDATED FINANCIAL RESULTS
Consolidated Net Income
Three months ended September 30
Six months ended September 30
(millions)
2017
2016 Change
2017
2016 Change
Income (Loss) before unrealized market value adjustments Impact of fair value adjustments Revaluation of natural gas in storage
$
5
$
(7)
$
12
$
(3)
$
(10)
$
7
-
10
(10)
6
56 14
(50) (21)
(3)
3
(6)
(7)
Consolidated net income (loss)
$
2
$
6
$
(4)
$
(4)
$
60
$
(64)
The loss before unrealized market value adjustments was $3 million for the six months ending September 30, 2017, $7 million favourable compared to the $10 million loss in 2016, due primarily to the net reversal of a $10 million impairment taken on non-core storage assets. The non-core storage asset is transferring from a single cash generating unit and into a larger cash generating unit of storage assets, a result of changing corporate strategy. In general, the long term price of natural gas is flat, which means that there are less favourable price differentials between current and forward market prices and limited opportunities to use storage to generate gas marketing margins. This is resulting in the continued impairment of the remaining non-core storage, treatment, gathering and energy service assets. With respect to core operations, the delivery rate increases effective November 1, 2016, and November 1, 2017 combined with increased transportation loads will continue to contribute to higher revenues compared to 2016. Both operating and maintenance, and depreciation have increased compared to 2016, a result of growth in the Corporation’s natural gas infrastructure and customer base. Continued cost management efforts have resulted in employee benefits remaining unchanged from the prior year.
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2017-18 SECOND QUARTER REPORT
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