Management’s Discussions and Analysis
Operating and Maintenance Operating and maintenance expenses were $14 million higher than in 2024, primarily due to system licensing and hosting costs, implementation costs of new business support software, and third-party transportation costs increasing. As the Corporation continues to leverage technology to improve the customer’s experience while also implementing business process improvements, the costs of implementing and hosting these applications continue to rise as more applications are transitioned from owned to subscription models. In addition, the Corporation utilizes third-party transportation to serve customer needs when it is more cost effective than developing new assets. With growing system requirements — resulting from customers continuing to choose, and other customers transitioning to, natural gas as their energy source — transportation costs are increasing due to both rate increases and additional demand service contracts have been placed with third-party transportation providers. Depreciation and Amortization Depreciation and amortization were $2 million higher than the same period in 2024, as the Corporation continues to balance the safety and system integrity of its natural gas infrastructure with the demand of its residential, commercial and industrial customer base. Strategic capital investments required that necessary infrastructure be put into service to meet this growing customer demand. Net Finance Expenses Net finance expenses for 2025 were comparable to 2024. Although a loss was realized on the redemption of a debt retirement fund used to extinguish a long-term debt maturity during the period, interest rates have declined year-over-year, offsetting the one-time loss. The debt-to-equity ratio at September 30, 2025, is 61 per cent, which falls within the long-term target range of 58 to 63 per cent debt. 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 September 30,
Six months ended September 30,
(millions)
2025
2024
Change
2025
2024
Change
Cash provided by operating activities Cash used in investing activities
$
37
$
60
$
(23) (45)
$
88
$
139
$
(51) (76)
(118)
(73)
(185)
(109)
Cash provided by (used in) financing activities Decrease in cash and cash equivalents
80
13
67
96
(48) (18)
144
$
(1)
$
-
$
(1)
$
(1)
$
$
17
Operating Activities Cash provided by operating activities decreased $51 million through the six months ended September 30, 2025, compared to the same period in 2024, primarily due to unfavourable changes in working capital offsetting the positive operating results. High short term liability balances were paid down in the first quarter which more than offset the positive cash flow from asset optimization activities and customer capital contributions.
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