Emera Reports 2024 Second Quarter Financial Results
Highlights
-
Growth in Reported Net Income Per Share (“EPS”)(1): Reported EPS saw a substantial increase of
$0.35 to$0.45 in Q2 2024, compared to$0.10 in Q2 2023. This improvement was driven by a gain on the strategic sale of the Labrador Island Link (“LIL”). -
Decrease in Adjusted EPS: Adjusted EPS decreased
$0.07 to$0.53 compared to adjusted EPS of$0.60 in Q2 2023. The decline was primarily driven by:- Higher corporate costs resulting from increased interest expenses, and unrealized foreign exchange (“FX”) losses on the translation of short-term debt balances;
-
A decrease in earnings at
Nova Scotia Power (“NSPI”) resulting from higher investment in reliability and customer experience initiatives impacting operating costs; -
A decrease in earnings at
New Mexico Gas Company (“NMGC”) due to higher operating costs.
-
Strong Performance in Florida Businesses:
Tampa Electric (“TEC”) andPeoples Gas (“PGS”) reported higher earnings due to robust customer growth and new base rates, affirming the significant potential of ourFlorida operations. -
Strengthening the Balance Sheet: We took definitive measures to enhance our financial position, improving our balance sheet and key credit metrics. The strategic sale of Emera’s interest in the LIL reduced holding company debt by
$957 million and the replacement of US$500 million of holding company debt with hybrid capital, further optimized the capital structure and improved credit metrics. The announced sale of NMGC toBernhard Capital Partners for an enterprise value ofUS$1.252 billion will additionally strengthen the balance sheet when closed in late 2025. These actions demonstrate our commitment to financial strength and flexibility. -
Capital Deployment on Track: Emera is on course to deploy
$2.9 billion in capital in 2024, with$1.4 billion already invested in the first half of the year.
“While our adjusted earnings were lower for the quarter and for the year to date, we expect stronger results for the balance of the year. We saw strong operational performance and customer growth in our utilities, particularly
Q2 2024 Financial Results
Q2 2024 reported net income was
Reported net income for the quarter included a
Q2 2024 adjusted net income(1) was
Year-to-date Financial Results
Year-to-date reported net income was
Year-to-date adjusted net income(1) was
Year-to-date adjusted net income decreased primarily due to decreased earnings at NMGC, NSPI, TEC and EES, increased Corporate interest expense, higher operating, maintenance and general expenses (“OM&G”) in the Corporate segment due to the timing of long-term compensation hedges and realized FX losses. These were partially offset by increased earnings at PGS and increased Corporate income tax recovery.
The translation impact of a weaker Canadian dollar on US denominated earnings was more than offset by the losses on FX hedges used to mitigate translation risk of US dollar earnings which, combined, decreased net income by
(1) See “Non-GAAP Financial Measures and Ratios” noted below and “Segment Results and Non-GAAP Reconciliation” below for reconciliation to nearest USGAAP measure.
Segment Results and Non-GAAP Reconciliation
For the |
|
Three months ended
|
Six Months ended
|
|||
millions of Canadian dollars (except per share amounts) |
|
2024 |
|
2023 |
2024 |
2023 |
Adjusted net income 1,2 |
|
|
|
|
|
|
Florida Electric Utility |
$ |
187 |
$ |
177 |
272 |
284 |
|
|
42 |
|
49 |
129 |
141 |
|
|
44 |
|
38 |
142 |
132 |
Other |
|
8 |
|
10 |
17 |
14 |
Other 3 |
|
(130) |
|
(112) |
(193) |
(141) |
Adjusted net income1,2 |
$ |
151 |
$ |
162 |
367 |
430 |
Gain on sale, after-tax and transaction costs4 |
|
107 |
|
- |
107 |
- |
MTM (loss) gain, after-tax5 |
|
(129) |
|
(134) |
(138) |
158 |
Net income attributable to common shareholders |
$ |
129 |
$ |
28 |
336 |
588 |
EPS (basic) |
$ |
0.45 |
$ |
0.10 |
1.17 |
2.17 |
Adjusted EPS (basic) 1,2 |
$ |
0.53 |
$ |
0.60 |
1.28 |
1.58 |
1 See “Non-GAAP Financial Measures and Ratios” noted below.
2 Excludes the gain on sale, after tax and transaction costs of Emera’s LIL equity interest and the effect of after-tax MTM adjustments.
3 Lower earnings quarter-over-quarter, primarily due to increased interest expense, realized FX loss on translation of foreign currency bank balances, partially offset by increased income tax recovery. Year-over-year change primarily due to increased interest expense and operating expense and lower contributions from EES.
4 Net of income tax expense of
5 Net of income tax recovery of
Consolidated Financial Review
The following table highlights significant changes in adjusted net income attributable to common shareholders from 2023 to 2024.
For the |
Three months ended |
Six months ended |
||
millions of Canadian dollars |
|
|
||
Adjusted net income – 2023 1,2 |
$ |
162 |
$ |
430 |
Operating Unit Performance |
|
|
|
|
Decreased earnings at NMGC due to increased OM&G and higher interest, partially offset by lower income tax expense. Year-over-year earnings also decreased due to lower asset optimization revenues |
|
(5) |
|
(19) |
Decreased earnings at NSPI due to increased OM&G primarily due to investment in reliability initiatives and increased income tax expense, partially offset by higher revenues due to higher residential sales volumes |
|
(5) |
|
(16) |
Decreased earnings at EES year-over-year due to less favourable market conditions |
|
- |
|
(10) |
Increased earnings at PGS due to higher revenue from new base rates, customer growth, and favourable weather, partially offset by higher interest expense, OM&G and depreciation expense |
|
11 |
|
32 |
Increased earnings quarter-over-quarter at TEC due to higher revenues as a result of customer growth and new base rates, and lower income tax expense, partially offset by higher OM&G due to higher generation and transmission and distribution costs, and higher depreciation. Year-over-year earnings decreased due to higher OM&G and depreciation, and unfavourable weather, partially offset by higher revenue from customer growth and new base rates, and lower income tax expense |
|
10 |
|
(12) |
Corporate |
|
|
|
|
Increased interest expense, pre-tax, due to increased interest rates and increased average total debt |
|
(14) |
|
(23) |
FX losses on the translation of USD short-term debt balances |
|
(6) |
|
(5) |
Increased income tax recovery, primarily due to increased losses before provision for income taxes |
|
7 |
|
15 |
Decreased/(increased) OM&G pre-tax, primarily due to the timing of long-term compensation hedges |
|
2 |
|
(17) |
Other Variances |
|
(11) |
|
(8) |
Adjusted net income – 2024 1,2 |
$ |
151 |
$ |
367 |
1
See “Non-GAAP Financial Measures and Ratios” noted below and “Segment Results and Non-GAAP Reconciliation" for reconciliation to nearest GAAP measure.
2
Excludes gain on sale, after-tax and transaction costs of Emera’s LIL equity interest and the effect of MTM adjustments, after- tax.
1 Non-GAAP Financial Measures and Ratios
Emera uses financial measures that do not have standardized meaning under USGAAP and may not be comparable to similar measures presented by other entities. Emera calculates the non-GAAP measures and ratios by adjusting certain GAAP measures for specific items. Management believes excluding these items better distinguishes the ongoing operations of the business. For further information on the non-GAAP financial measure, adjusted net income, and the non-GAAP ratio, adjusted EPS – basic, refer to the "Non-GAAP Financial Measures and Ratios" section of the Emera’s Q2 2024 MD&A which is incorporated herein by reference and can be found on SEDAR+ at www.sedarplus.ca. Reconciliation to the nearest GAAP measure is included in “Segment Results and Non-GAAP Reconciliation” above.
Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable securities laws. By its nature, forward-looking information requires Emera to make assumptions and is subject to inherent risks and uncertainties. These statements reflect Emera management’s current beliefs and are based on information currently available to Emera management. There is a risk that predictions, forecasts, conclusions and projections that constitute forward-looking information will not prove to be accurate, that Emera’s assumptions may not be correct and that actual results may differ materially from such forward-looking information. Additional detailed information about these assumptions, risks and uncertainties is included in Emera’s securities regulatory filings, including under the heading “Business Risks and Risk Management” in Emera’s annual Management’s Discussion and Analysis, and under the heading “Principal Risks and Uncertainties” in the notes to Emera’s annual and interim financial statements, which can be found on SEDAR+ at www.sedarplus.ca.
Teleconference Call
The company will be hosting a teleconference today,
Analysts and other interested parties in
A live and archived audio webcast of the teleconference will be available on the Company's website, www.emera.com. A replay of the teleconference will be available on the Company’s website two hours after the conclusion of the call.
About Emera
Emera is a geographically diverse energy and services company headquartered in
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Investor Relations
902-474-2126
dave.bezanson@emera.com
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