Management’s Discussion and Analysis
Introduction The Management’s Discussion and Analysis (MD&A) highlights the primary factors that affected SaskEnergy’s consolidated financial performance for the six months ended September 30, 2025. Using financial and operating results as its basis, the MD&A describes the Corporation’s past performance and future prospects, enabling readers to view SaskEnergy from the perspective of management. The MD&A is presented as at November 24, 2025 and should be read in conjunction with the Corporation’s condensed consolidated financial statements, which have been prepared in accordance with IAS 34 Interim Financial Reporting using accounting policies consistent with IFRS® Accounting Standards. For additional information related to the Corporation, refer to SaskEnergy’s 2024-25 Annual Report. The MD&A contains certain forward-looking statements that are subject to inherent uncertainties and risks. Many of these risks are described in the Risk Management and Disclosure section of SaskEnergy’s 2024-25 Annual Report. All forward- looking statements reflect the Corporation’s best estimates and assumptions based on information available at the time the statements were made. However, actual results and events may vary significantly from those included in, contemplated by, or implied by such statements. The volume of natural gas delivered to customers is sensitive to variations in weather, particularly through the prime heating season of November to March. Additionally, changes in market value adjustments may cause significant fluctuations in net income due to the volatility of natural gas prices. Therefore, the condensed consolidated financial results for the first three months of 2025-26 should not be taken as indicative of the performance to be expected for the full year. The Corporation’s financial results are subject to variation, especially given the volatility of natural gas prices. To compare financial performance from period to period, the Corporation uses the following measures: income before unrealized market value adjustments; realized margin on commodity sales; and realized margin on asset optimization sales. Each measure removes the impact of fair value adjustments on financial and derivative instruments and the revaluation of natural gas in storage to the lower of cost and net realizable value. Unrealized market value adjustments vary with market prices of natural gas, drive significant changes in the Corporation’s consolidated net income and may obscure other business factors that are also important to understand the Corporation’s financial results. The measures referred to above are non-IFRS Accounting Standard measures, in that there is no standardized definition and may not be comparable to similar measures presented by other entities. The discussion of the Corporation’s results in the MD&A, set out on the following pages, is a comparison of the results for the six months ending September 30, 2025, to the results for the six months ending September 30, 2024, unless otherwise noted. Consolidated Financial Results Consolidated Net Loss
Three months ended September 30,
Six months ended September 30,
(millions)
2025
2024
Change
2025
2024
Change
Net loss before unrealized market value adjustments Impact of fair value adjustments Revaluation of natural gas in storage
$
(25)
$
(15)
$
(10)
$
(14)
$
(21)
$
7
(1)
(2)
1
(7)
(5)
(2)
-
1
(1)
-
-
-
Consolidated net loss
$
(26)
$
(16)
$
(10)
$
(21)
$
(26)
$
5
The net loss before unrealized market value adjustments was $14 million at September 30, 2025, $7 million favourable compared to a net loss of $21 million from the same period in 2024. The favourable variance primarily results from higher customer capital contributions, which rose by $22 million in the first half of the year due to increased transmission customer connection activity. These favourable results were partially offset by higher operating and maintenance expenses, as contracts and consulting expenses and third-party transportation costs were higher year over year. Forward natural gas market prices at September 30, 2025, declined below March 2025 levels, generating a $7 million unfavourable fair value adjustment as the unfavourable price differential between average deal price and average market price on outstanding commodity purchase contracts declined a further $0.36 per gigajoule (GJ) at September 30, 2025, compared to March 31, 2025.
4
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