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 three months ended June 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 August 27, 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 three months ended June 30, 2025, to the results for the three months ended June 30, 2024, unless otherwise noted.
Consolidated Financial Results Consolidated Net Income (Loss)
Three months ended June 30,
(millions)
2025
2024
Change
Net income (loss) before unrealized market value adjustments
$
11
$
(6) (3) (1)
$
17
Impact of fair value adjustments Revaluation of natural gas in storage Consolidated net income (loss)
(6)
(3)
-
1
$
5
$
(10)
$
15
The net income before unrealized market value adjustments was $11 million at June 30,2025, $17 million favourable compared to a net loss of $6 million in 2024, resulting from higher asset optimization margins and increased customer capital contributions. These were partially offset by the unfavourable impact of higher operating and maintenance expenses. The Corporation’s realized margin on asset optimization activities for the three months ended June 30, 2025, was $5 million higher than in 2024, as the margin increased $0.16 per GJ compared to prior year. In addition to improved margins compared to the prior year, volumes were also higher as more opportunities were available in the market. Furthermore, customer capital contributions from customers increased by $22 million in the first quarter of the year as a result of 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.
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