ATCO REPORTS SECOND QUARTER 2024 EARNINGS
Second quarter earnings attributable to Class I and Class II Shares reported in accordance with International Financial Reporting Standards (IFRS earnings) were
IFRS earnings include timing adjustments related to rate-regulated activities, unrealized gains or losses on mark-to-market forward and swap commodity contracts, one-time gains and losses, impairments, and items that are not in the normal course of business or a result of day-to-day operations. These items are not included in adjusted earnings.
RECENT DEVELOPMENTS
ATCO Structures
- Awarded an
$87 million contract for a 700-person rapid deployment construction camp in support of mining projects in the Pilbara region ofWestern Australia . Manufacturing and site works are expected to commence in the third quarter of 2024 with final site completion anticipated in the fourth quarter of 2025. - Awarded a
$78 million contract for a 410-person construction camp inHughenden ,Queensland , and a 230-person construction camp inRichmond ,Queensland . Both camps are in support of the CopperString 2032 high-voltage transmission line project inNorth Queensland, Australia . Manufacturing and site works are expected to commence in the third quarter of 2024 with final site completion anticipated for the second quarter of 2025. - Awarded a
$34 million contract for a temporary 86-person camp and a permanent 252-person camp to tie into and expand an existing facility inWestern Australia . Manufacturing is expected to commence in the third quarter of 2024 with site works anticipated to be concluded in early 2025. - Awarded numerous contracts throughout the US including: a
$5 million contract for 18 units configured as a 2-storey office complex inSilverdale, Washington , a$3 million contract to supply 54 space rental units inPlaquemines Parish, Louisiana , a$3 million contract to design, supply, transport and install a transportation building comprising of 14 complexed units forHighline Public Schools inBurien, Washington , and a$2 million rental contract for 30 space rentals units for a data centre inWyoming .
- On
May 8, 2024 ,Canadian Utilities announced its largest ever energy infrastructure project, the Yellowhead Mainline, with a projected investment of over$2 billion . The project is expected to build approximately 200 kilometres of high-pressure natural gas pipeline and related control and compression facilities that will run fromPeers, Alberta , to the northeastEdmonton area and have the capability to deliver about 1,000 terajoules (or 1 billion cubic feet) per day of incremental natural gas. Subject to regulatory and company approvals, construction is expected to commence in 2026 and the pipeline is expected to be on-stream in the fourth quarter of 2027. - On
June 26, 2024 , ATCO EnPower, in partnership withShell Canada Limited , announced that a Final Investment Decision has been made to proceed with the first phase of the Atlas Carbon Storage Hub. The first phase of the project is expected to be operational in late 2028, anchored by CO2 volumes from Shell's Polaris carbon capture project. Atlas represents the first step in ATCO EnPower's work to create a full value chain for hydrogen development – from production and carbon abatement to transport and export. The facility will be located east ofEdmonton and able to store emissions from the Alberta Industrial Heartland region. - Incurred
$322 million in capital expenditures in the second quarter of 2024, of which 95 per cent was invested in our regulated utilities in ATCO Energy Systems andATCO Australia , and 5 per cent mainly in ATCO EnPower.
Corporate
- On
July 11, 2024 , ATCO declared a third quarter dividend of48.98 cents per share or$1.96 per share on an annualized basis per Class I non-voting and Class II voting share.
FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED EARNINGS
A financial summary of the consolidated subsidiaries of ATCO and a reconciliation of adjusted earnings to earnings attributable to Class I non-voting shares and Class II voting shares is provided below:
|
Three Months Ended |
Six Months Ended |
||
($ millions except share data) |
2024 |
2023 |
2024 |
2023 |
|
|
|
|
|
Adjusted Earnings |
96 |
87 |
244 |
224 |
Restructuring (1) |
(23) |
— |
(23) |
— |
|
(4) |
— |
(4) |
— |
Unrealized (losses) gains on mark-to-market forward and swap commodity contracts (3) |
(11) |
3 |
(5) |
35 |
Rate-regulated activities (4) |
(4) |
(4) |
(8) |
1 |
IT Common Matters decision (5) |
(2) |
(2) |
(5) |
(5) |
Impairment (6) |
— |
(4) |
— |
(4) |
Transition of managed IT services (7) |
— |
— |
— |
(5) |
Other |
— |
(1) |
— |
— |
|
|
|
|
|
Earnings attributable to Class I non-voting and Class II voting shares |
52 |
79 |
199 |
246 |
Weighted average shares outstanding (millions of shares) |
112.2 |
113.2 |
112.2 |
113.4 |
(1) |
In the second quarter of 2024, the Company recorded restructuring costs of |
(2) |
In the second quarter of 2024, the Company recognized costs of |
(3) |
The Company's electricity generation and retail electricity and natural gas businesses in |
(4) |
The Company records significant timing adjustments as a result of the differences between rate-regulated accounting and International Financial Reporting Standards with respect to additional revenues billed in the current year, revenues to be billed in future years, regulatory decisions received, and settlement of regulatory decisions and other items. |
(5) |
Consistent with the treatment of the gain on sale in 2014 from the IT services business by the Company, financial impacts associated with the IT Common Matters decision are excluded from adjusted earnings. |
(6) |
In the second quarter of 2023, the Company recognized an impairment of |
(7) |
In the first quarter of 2023, the Company recognized legal and other costs of |
This news release should be read in concert with the full disclosure documents. ATCO's unaudited consolidated financial statements and management's discussion and analysis for the quarter ended
TELECONFERENCE AND WEBCAST
ATCO will hold a live teleconference and webcast with
Opening remarks will be followed by a question and answer period with investment analysts. Participants are asked to please dial-in 10 minutes prior to the start and request to join the ATCO teleconference.
Management invites interested parties to listen via live webcast at: https://www.atco.com/en-ca/about-us/investors/events-presentations.html.
A replay of the teleconference will be available approximately two hours after the conclusion of the call until
As a global enterprise
Investor & Analyst Inquiries:
Senior Vice President, Financial Operations
Colin.Jackson@atco.com
(403) 808 2636
Media Inquiries:
Kurt Kadatz
Director, Corporate Communications
Kurt.Kadatz@atco.com
(587) 228 4571
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Other Financial and Non-GAAP Measures
This news release includes references to "adjusted earnings" which is a "total of segments measure" as that term is defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure. The most directly comparable measure reported in accordance with International Financial Reporting Standards is "earnings attributable to Class I and Class II shares". For additional information, see "Financial Summary and Reconciliation of Adjusted Earnings" in this news release, and "Other Financial and Non-GAAP Measures" in the Company's Management's Discussion and Analysis for the six months ended
Forward-Looking Information
Certain statements contained in this news release constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "estimate", "expect", "may", "will", "intend", "should", "goals", "targets", "strategy", "future", and similar expressions. In particular, forward-looking information in this news release includes, but is not limited to, references to: the expected value, timing and term of contracts; the expected timing of commencement, completion or commercial operations of activities, contracts and projects; including ATCO Structures' various projects; expectations regarding the Yellowhead Mainline project, including anticipated investment in the project, the timing for commencement of construction and bringing the project on-stream, and the anticipated size, specifications and incremental natural gas delivery capacity of the project; expectations regarding the timing of commercial operations of the Atlas Carbon Storage Hub project, the storage of industrial emissions, including from Shell's Polaris carbon capture project; and the payment of dividends.
Although the Company believes that the expectations reflected in the forward-looking information are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct. Forward-looking information should not be unduly relied upon. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors, which may cause actual results, levels of activity, and achievements to differ materially from those anticipated in such forward-looking information. The forward-looking information reflects the Company's beliefs and assumptions with respect to, among other things, the development and performance of technology and technological innovations; continuing collaboration with certain business partners, and regulatory and environmental groups; the performance of assets and equipment; the ability to meet current project schedules, and other assumptions inherent in management's expectations in respect of the forward-looking information identified herein.
The Company's actual results could differ materially from those anticipated in this forward-looking information as a result of, among other things, risks inherent in the performance of assets; capital efficiencies and cost savings; applicable laws, regulations and government policies; including uncertainty with respect to the interpretation of omnibus Bill C-59 and the
related amendments to the Competition Act (
Any forward-looking information contained in this news release represents the Company's expectations as of the date hereof, and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.
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