CREATING VALUE The Creating Value strategic mandate ensures SaskEnergy is focused on the financial aspects of its business – ensuring efficient and effective service to customers and providing a reasonable return to the shareholder. In conducting business, SaskEnergy is nimble, adaptable and flexible, while always focused on efficiency and results. SaskEnergy’s metrics related to the Creating Value mandate are in place to ensure the Corporation is adding value for its shareholder, customers and employees through financially strong and sustainable operations, sound corporate governance and fostering positive relationships within the communities we serve. Within Creating Value, there are three categories of measures — Financial Strength, Environmental and Community Relationship.
March 31, 2021 Target
March 31, 2020 Target
March 31, 2019 Target
March 31, 2018 Target
March 31, 2017 Target
March 31, 2017 Actual
March 31, 2016 Actual
Strategic Measure
Financial Strength
59/41 8.8%
Debt/Equity Ratio
61/39 11.6%
60/40 9.9%
63/37 8.7%
63/37 8.7%
63/37 9.0%
63/37 9.0%
Consolidated Return on Equity Income Before Unrealized Market Value Adjustments (millions)
$70
$86
$77
$91
$74
$74
$80
Environmental
338
Greenhouse Gas Emissions (Tonnes of CO 2 Horsepower Hours)
391
425
395
395
395
395
e/million Running
Community Relationship
0.6%
Community Sponsorships as a Percentage of Net Income Total Contracts – Percentage of Aboriginal Labour Content
0.6%
0.8%
–
–
–
–
13.6%
15%
14%
15%
16%
16%
16%
Financial Strength SaskEnergy strives to maintain an appropriate capital structure while providing reasonable financial returns to its holding company, CIC, and competitive rates to customers. The Corporation works hard to balance the interests of both CIC and its customers — focusing on annual profitability and efficient operations with a long-term view to financial sustainability. Operating net income results were adversely affected by the warmer than normal weather, which has a negative effect on delivery revenue, and impairment of non-core assets. Aggressive cost management resulted in lower operating costs; however, these efforts were partially offset by higher third-party transport costs that were necessary to import natural gas from Alberta to meet Saskatchewan supply requirements. Due to the current low natural gas price situation, SaskEnergy recognized $26 million in impairments on its non-core storage assets. Additional impairments were taken on other underperforming non-core assets including a $1.5 million write-down on waste heat recovery assets at Rosetown. An improvement in market conditions is required for the recovery of some of these impairments in future periods. Capital investment levels during the year were lower than planned due to customer tie-in work that did not proceed as customers’ plans changed. As a result, the Corporation’s debt levels were also lower than planned for the period. Environmental SaskEnergy is also focused on environmental sustainability throughout its operations, and has made significant progress in the controllable aspects of its corporate greenhouse gas (GHG) emissions. While increased natural gas usage is beneficial to achieving emission targets in other sectors and in the province as a whole, this creates challenges for SaskEnergy in terms of achieving its overall corporate GHG emission reduction targets.
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Management’s Discussion & Analysis
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