AltaGas Reports Record Earnings in First Quarter and Increases Dividend 16 Percent
01 May 2014 - 9:45PM
Marketwired Canada
First Quarter 2014 Highlights
-- Record normalized earnings of $73.7 million, a 33 percent increase
compared to first quarter 2013;
-- 23 percent increase to $179.2 million in normalized EBITDA, compared to
first quarter 2013;
-- Normalized funds from operations of $129.8 million, compared to $122.4
million in first quarter 2013;
-- Forrest Kerr nears completion with the commencement of waterflow on
April 28; and
-- Increased dividend by $0.02 per share per month for an annual dividend
of $1.77 per share.
AltaGas Ltd. (AltaGas) (TSX:ALA)(TSX:ALA.PR.A)(TSX:ALA.PR.U)(TSX:ALA.PR.E) today
reported record first quarter normalized earnings of $73.7 million ($0.60 per
share), compared to $55.5 million ($0.53 per share) in the same period 2013.
Normalized EBITDA increased 23 percent to $179.2 million for the first quarter
2014, compared to $145.9 million for the same period 2013. Normalized funds from
operations was $129.8 million ($1.06 per share) for the three months ended March
31, 2014, compared to $122.4 million ($1.16 per share) for the same period 2013.
"We are pleased to report a record quarter with strong asset performance across
all our business segments," said David Cornhill, Chairman and CEO of AltaGas.
"The stronger results were driven mainly by the energy infrastructure assets we
added over the past two years and there is more to come. The Board and
management remain committed to delivering shareholder value as we continue to
execute on our five-year, $2.5 billion growth plans."
Increased earnings in the first quarter were driven by higher natural gas
volumes processed, the partial ownership of Petrogas, the addition of Blythe,
colder weather in Michigan, Alberta and Nova Scotia, and favorable exchange
rates. Results in the quarter were partially offset by lower earnings from Power
in Alberta and higher costs in Gas related to natural gas storage and extraction
premiums. In addition, the Blythe facility was on major turnaround during the
month of March.
On a GAAP basis, net income applicable to common shares was $39.9 million ($0.33
per share) for the three months ended March 31, 2014, compared to $49.0 million
($0.46 per share) for the same period 2013. Net income applicable to common
shares includes an after-tax gain of $9.0 million from the sale of assets,
offset by a non-cash after-tax provision of $28.7 million related to assets from
the acquisition of Taylor NGL Limited Partnership in 2008, a non-cash after-tax
provision of $8.1 million related to a number of small hydro power assets under
development that are in a sales process, mark-to-market accounting and the cost
of early redemption of medium-term notes.
In the first quarter, AltaGas continued to make progress on its five-year $2.5
billion growth program. AltaGas sanctioned the Alton natural gas storage project
in Nova Scotia and the regional liquefied natural gas (LNG) project in Dawson
Creek, B.C., for approximately $125 million. This brings total secured growth
capital to over $1 billion.
Northwest Run-of-river Projects
AltaGas continues to make solid progress on its three Northwest run-of-river
hydro projects. Forrest Kerr completed commissioning of the head-works and
intake structure at the end of March, which set the stage for the project to
achieve a significant milestone on April 28 with commencement of waterflow into
the power tunnel. Remaining commissioning and construction activities continue
on schedule with the focus on the powerhouse systems and high voltage
switchyard. The tailrace tunnel was completed during first quarter 2014 with all
tunnelling and underground excavation work now finished. AltaGas expects the
Northwest Transmission Line to be available in time to enable Forrest Kerr to be
in service by mid-2014.
At the 16 MW Volcano Creek project, construction continues to pace ahead of
schedule. The tailrace is complete, with no further in-river work required. The
turbine assembly is in progress and the penstock installation has commenced. The
project remains on track to be in service in late 2014.
At the 66 MW McLymont Creek project, excavation of the powerhouse foundation is
complete and installation of the powerhouse foundations has commenced. Clearing
of the intake access road is 85 percent complete and approximately 65 percent of
the 2,800 metre tunnel has been excavated. The project is expected to be in
service in mid-2015.
Energy Exports
AltaGas has made significant progress in developing its liquefied petroleum gas
(LPG) export business. The AltaGas Idemitsu Joint Venture Limited Partnership's
(AIJVLP) two-thirds ownership of Petrogas, together with Petrogas' acquisition
of the Ferndale LPG export terminal in the State of Washington are significant
steps in moving the LPG export initiative forward. The goal is to reach 60,000
Bbls/d of export capability through Ferndale and one other export facility by
the end of the current decade.
AltaGas, Idemitsu and Petrogas are working together to build the LPG export
business from Ferndale. LPG shipments are targeted to begin in the second
quarter of 2014 and increase over the course of the next few years. In addition
to the Ferndale site, the AIJVLP continues to progress the development of a LPG
export terminal on the west coast of Canada. Terminal sites and refrigeration
technology have been identified and FEED studies are ongoing.
AltaGas continues to advance its LNG export initiative. The AIJVLP continues to
focus on the Triton LNG project, which received approval from the National
Energy Board on April 16, 2014, to export 2.3 million tonnes of LNG per year.
LNG exports are subject to consultations with First Nations and the completion
of the feasibility study, siting, permitting, regulatory approvals and facility
construction.
The AIJVLP continues to work with various parties to support the Companies'
Creditors Arrangement Act (CCAA) Plan of Arrangement proceedings for the Douglas
Channel LNG project. The various parties continue to work on completing term
sheets which may allow the project to be restructured under CCAA in accordance
with the terms which have been substantially agreed to by the secured creditors.
The completion of the term sheets is currently targeted for May 5. If the May 5
deadline is met, AIJVLP plans to develop definitive agreements and stakeholders
are expected to vote on the CCAA plan of arrangement following the approximately
six-week proof of claim period.
Monthly Common Share Dividend and Quarterly Preferred Share Dividend
-- The Board of Directors increased the dividend by 16 percent and approved
the May 2014 dividend of $0.1475 per common share. The dividend will be
paid on June 16, 2014, to common shareholders of record on May 26, 2014.
The ex-dividend date is May 22, 2014. This dividend is an eligible
dividend for Canadian income tax purposes;
-- The Board of Directors approved a dividend of $0.3125 per share for the
period commencing April 1, 2014 and ending June 30, 2014, on AltaGas'
outstanding Series A Preferred Shares. The dividend will be paid on June
30, 2014 to shareholders of record on June 17, 2014. The ex-dividend
date is June 13, 2014;
-- The Board of Directors approved a dividend of US$0.275 per share for the
period commencing April 1, 2014 and ending June 30, 2014, on AltaGas'
outstanding Series C Preferred Shares. The dividend will be paid on June
30, 2014 to shareholders of record on June 17, 2014. The ex-dividend
date is June 13, 2014; and
-- The Board of Directors also approved a dividend of $0.3125 per share for
the period commencing April 1, 2014, and ending June 30, 2014, on
AltaGas' outstanding Series E Preferred Shares. The dividend will be
paid on June 30, 2014 to shareholders of record on June 17, 2014. The
ex-dividend date is June 13, 2014.
CONSOLIDATED FINANCIAL REVIEW
Three months ended
(unaudited) March 31
($ millions) 2014 2013
----------------------------------------------------------------------------
Revenue 823.8 613.5
Net revenue(1) 296.5 237.1
Normalized operating income(1) 137.0 109.2
Normalized EBITDA(1) 179.2 145.9
Net income applicable to common shares 39.9 49.0
Normalized net income(1) 73.7 55.5
Total assets 7,377.4 5,972.9
Total long-term liabilities 4,044.2 3,261.3
Net additions to property, plant and equipment 153.7 119.7
Dividends declared(2) 47.0 38.0
Cash flows
Normalized funds from operations(1) 129.8 122.4
Three months ended
March 31
($ per share, except shares outstanding) 2014 2013
----------------------------------------------------------------------------
Normalized EBITDA(1) 1.46 1.38
Net income - basic 0.33 0.46
Net income - diluted 0.32 0.45
Normalized net income(1) 0.60 0.53
Dividends declared(2) 0.38 0.36
Cash flows
Normalized funds from operations(1) 1.06 1.16
Shares outstanding - basic (millions)
During the period(3) 122.6 105.7
End of period 122.9 106.1
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(1) Non-GAAP financial measure; see discussion in Non-GAAP Financial
Measures section of the first quarter 2014 MD&A.
(2) Dividends declared per common share per month of $0.12 beginning
September 10, 2012, $0.125 beginning April 24, 2013 and $0.1275 beginning
July 31, 2013.
(3) Weighted average.
CONFERENCE CALL AND WEBCAST DETAILS:
AltaGas will hold a conference call today at 9:00 a.m. MT (11:00 a.m. ET) to
discuss first quarter financial results, progress on construction projects and
other corporate developments.
Members of the media, investment communities and other interested parties may
dial (416) 340-2218 or call toll free at 1-866-225-0198. There is no passcode.
Please note that the conference call will also be webcast. To listen, please go
to http://www.altagas.ca/investors/presentations_and_events. The webcast will be
archived for one year.
Shortly after the conclusion of the call, a replay will be available by dialing
(905) 694-9451 or 1-800-408-3053. The passcode is 6350008. The replay expires at
midnight (Eastern) on May 8, 2014.
AltaGas is an energy infrastructure business with a focus on natural gas, power
and regulated utilities. AltaGas creates value by acquiring, growing and
optimizing its energy infrastructure, including a focus on clean energy sources.
For more information visit: www.altagas.ca.
This news release contains forward-looking statements. When used in this news
release, the words "may", "would", "could", "will", "intend", "plan",
"anticipate", "believe", "seek", "propose", "estimate", "expect", and similar
expressions, as they relate to AltaGas or an affiliate of AltaGas, are intended
to identify forward-looking statements. In particular, this news release
contains forward-looking statements with respect to, among other things,
business objectives, expected growth, results of operations, performance,
business projects and opportunities and financial results. These statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those anticipated in such
forward-looking statements. Such statements reflect AltaGas' current views with
respect to future events based on certain material factors and assumptions and
are subject to certain risks and uncertainties, including without limitation,
changes in market, competition, governmental or regulatory developments, general
economic conditions and other factors set out in AltaGas' public disclosure
documents. Many factors could cause AltaGas' actual results, performance or
achievements to vary from those described in this news release, including
without limitation those listed above. These factors should not be construed as
exhaustive. Should one or more of these risks or uncertainties materialize, or
should assumptions underlying forward-looking statements prove incorrect, actual
results may vary materially from those described in this news release as
intended, planned, anticipated, believed, sought, proposed, estimated or
expected, and such forward-looking statements included in, or incorporated by
reference in this news release, should not be unduly relied upon. Such
statements speak only as of the date of this news release. AltaGas does not
intend, and does not assume any obligation, to update these forward-looking
statements. The forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
FOR FURTHER INFORMATION PLEASE CONTACT:
AltaGas Ltd.
Investment Community
1-877-691-7199
investor.relations@altagas.ca
AltaGas Ltd.
Media
(403) 269-5701
media.relations@altagas.ca
www.altagas.ca
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