Management’s Discussion and Analysis
growing customer demand.
Saskatchewan Taxes
Saskatchewan taxes were lower than in 2025, primarily due to the reduction in the Saskatchewan Corporation Capital Tax rate as part of the Province's two-year phase-out of the tax. Net Finance Expenses Net finance expenses for 2026 were slightly lower than in 2025. In the prior year, a loss was realized on the redemption of a debt retirement fund used to extinguish a long-term debt maturity. No such loss was recognized in the current year, and earnings amounted to $2 million. The debt-to-equity ratio at June 30, 2026, is 60.1 per cent, which falls within the long-term target range of 58 to 63 per cent debt.
Other Net Losses
The Corporation did not report any other gains or losses in the three months ended June 30, 2026. In the prior year, $1 million in other losses were recognized, as costs were incurred for the decommissioning of assets that did not have an established liability. 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 June 30,
(millions)
2026
2025 Change
Cash provided by operating activities Cash used in investing activities
$
94
$
51
$
43 23
(44) (42)
(67)
Cash (used in) provided by financing activities
16
(58)
Increase in cash and cash equivalents
$
8
$
-
$
8
Operating Activities Cash provided by operating activities increased by $43 million for the three months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to a $31 million favourable change in contract liabilities. In the prior year, a greater amount of customer contribution revenue was recognized as related assets were placed into service, resulting in a reduction of contract liabilities. In the current year, contract liabilities increased as customer contributions continued to be collected for capital projects that are under construction and have not yet been placed into service. The increase in operating cash flows was also driven by a $20 million favourable change in accounts payable and accrued liabilities. During the prior year, the Corporation settled a higher level of short-term liabilities, reflecting unusually high liability balances at the beginning of the fiscal year. As a result, cash outflows related to the settlement of these obligations were lower in the current year.
9
Made with FlippingBook Ebook Creator