SASKENERGY 2017-18 ANNUAL REPORT
Operating Activities Cash provided by operating activities was $312 million for the 12 months ending March 31, 2018, an increase of $87 million from 2016-17. Cash flows from operation are up due to the impact of higher commodity and gas marketing margins, along with the cash flow impact of a colder winter that resulted in higher delivery revenue. Investing Activities Cash used in investing activities totalled $258 million for the 12 months ending March 31, 2018, $60 million higher than the 12-month period ending March 31, 2017. Capital investment levels increased in 2017-18 due to higher system growth and customer connection spending requirements combined with higher system integrity spending compared to 2016-17. The majority of capital investment to the end of March 2018 focused on $138 million of customer growth and system expansion projects, which were a result of Saskatchewan residential and
industrial growth, as well as safety and system integrity programming of $93 million — a sign of the Corporation’s ongoing commitment to a safe, reliable system. Financing Activities Cash used in financing activities was $58 million through the 12 months ending March 31, 2018, which is $21 million higher than the $37 million used in financing activities in 2016-17. The Corporation used $49 million for interest payments, $30 million for dividends, and $100 million to pay debt and debt retirement fund obligations. As a result, the Corporation required an additional $121 million in long- term debt. SaskEnergy’s debt ratio at the end of March 31, 2018 of 56 per cent debt and 44 per cent equity improved from 59 per cent debt and 41 per cent equity at the end of 2016-17. This is slightly better than the Corporation’s long-term target range of 58 to 63 per cent debt.
CAPITAL EXPENDITURES Capital expenditures, as reported in the consolidated financial statements, were as follows:
(millions)
March 31, 2018
March 31, 2017
Change
$
138 93 13 11
$
96 83 14 5
$
42 10
Customer growth and system expansion Safety and system integrity Information systems Vehicle & equipment, buildings, furniture
(1) 6
$
255 $
198 $
57
Capital expenditures during 2017-18 of $255 million were higher than in the prior year due in part to economic growth increasing the requirements for new facilities, as well as increasing costs of building new infrastructure. SaskEnergy has continued its focus on upgrading its aging infrastructure. Capital expenditures of $138 million for 2017-18 on customer growth and system expansion are $42 million higher than the prior year. Of the current year expenditures, $24 million was spent on a pipeline project to expand the north-south system interconnection, allowing for the movement of additional gas to the northern pipeline system and to address increasing load growth in the northern part of the province. Increased spending on compression in the same area will also enable additional transportation at a nearby Alberta receipt point. These growth expenditures and investment in compression assets facilitated the revitalization of operations at Success and
Unity as well as additions to the compressor fleet. Growth in Saskatoon and Regina also led to additional spending on city bypasses and urban pipeline infrastructure projects.
CAPITAL EXPENDITURES
$300
$250 $200 $100 $150
$50 $0
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