AltaGas Ltd. ("AltaGas") (TSX:ALA) -
Highlights
-- Normalized net income of $26.8 million and normalized EBITDA of $107.3
million;
-- 27 percent increase in normalized funds from operations to $105.8
million;
-- Forrest Kerr generating power on time and budget;
-- Received regulatory approval on Harmattan Cogeneration III project; and
-- Acquired the Blythe II Energy Project, advancing the opportunity to
double the 507 MW Blythe facility.
AltaGas Ltd. ("AltaGas") (TSX:ALA) today reported second quarter normalized net
income of $26.8 million ($0.22 per share), compared to $35.5 million ($0.30 per
share) in the same period 2013. Normalized EBITDA was $107.3 million for the
second quarter 2014, compared to $106.2 million for the same period 2013.
Normalized funds from operations were $105.8 million ($0.86 per share) for the
second quarter 2014, compared to $83.1 million ($0.71 per share) for the same
period 2013.
"We continue to deliver solid earnings and cash flow and have hit record
financial results on a trailing twelve month basis," said David Cornhill,
Chairman and CEO of AltaGas. "We expect growth in earnings and cash flow to
continue with Forrest Kerr now in service and Volcano expected to come online
soon. Bringing these facilities on with 60-year contracts demonstrates the
successful execution of our strategy to grow our business with high quality
assets that deliver long-term stable cash flows."
In the second quarter, earnings were driven primarily by the partial ownership
of Petrogas, higher natural gas volumes processed, higher frac spreads,
contributions from the Blythe facility and higher rate base at the Utilities.
Earnings in the quarter were negatively impacted by significantly weaker power
prices in Alberta and warmer weather affecting the US utilities, compared to the
second quarter 2013. In the second quarter, funds from operations were strong as
a result of receiving approximately $28 million in dividends from AltaGas'
investment in Petrogas.
On a GAAP basis, net income applicable to common shares was $28.9 million ($0.23
per share) for the three months ended June 30, 2014, compared to $35.9 million
($0.31 per share) for the same period 2013.
In the second quarter, AltaGas acquired the Blythe Energy II project for US$8.5
million. The project, renamed the Sonoran Energy Project, is a fully permitted,
shovel ready project located adjacent to the existing 507 MW Blythe facility in
California. AltaGas expects to respond to anticipated upcoming Request for
Proposals by the end of 2014, with the potential to double the size of the
existing Blythe facility.
For the six months ended June 30, 2014, normalized net income increased 10
percent to $100.5 million compared to $91.1 million for the same period in 2013.
In both periods, normalized earnings per share were $0.82. Normalized funds from
operations increased to $235.7 million ($1.92 per share), compared to $199.2
million ($1.78 per share) for the same period in 2013.
On a GAAP basis, net income applicable to common shares was $68.8 million ($0.56
per share) for the six months ended June 30, 2014, compared to $85.0 million
($0.76 per share) for the same period 2013. Net income applicable to common
shares for the six months ended June 30, 2014 includes an after-tax gain of $8.9
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, mark-to-market accounting
and the cost of early redemption of medium-term notes.
Northwest Run-of-River Projects
On July 30, 2014, AltaGas announced that it has brought into service its 195 MW
Forrest Kerr run-of-river hydro project. Commissioning of the powerhouse systems
and high voltage switchyard were completed in July and the facility is tied-in
and delivering power to the Northwest Transmission Line. Over the next four to
six weeks a number of online electrical and system functional checks will be
performed during which time generation is expected to fluctuate. AltaGas expects
final project commercial operations to be achieved by the end of third quarter
2014.
At the 16 MW Volcano Creek project, construction continues to pace ahead of
schedule. The penstock excavation and switchyard work continues. Installation of
the turbine generators is complete and assembly of the powerhouse is well
underway. The project is on track to be in service shortly.
At the 66 MW McLymont Creek project, construction of the powerhouse foundation
is advancing. Excavation of the 2,800 meter power tunnel is approximately 80
percent complete. The project is expected to be in service in mid-2015.
Energy Exports
AltaGas continues to advance its Liquefied Petroleum Gas (LPG) export
initiative. AltaGas is now operating Petrogas' Ferndale facility in the State of
Washington. Capacity at the Ferndale facility is expected to ramp up to 30,000
Bbls/d over the next several years.
AltaGas Idemitsu Joint Venture Limited Partnership (AIJVLP) continues to make
progress on building an LPG export business off Canada's west coast for an
additional 30,000 Bbls/d. AIJVLP has been in active negotiations for potential
site locations and a site feasibility study is underway.
In addition to LPG, 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. AIJVLP continues to develop definitive
agreements and stakeholders are expected to vote on the CCAA plan of arrangement
following filing of the plan with the court. The CCAA court deadline to reach
definitive agreements is August 1, 2014.
Monthly Common Share Dividend and Quarterly Preferred Share Dividend
-- The Board of Directors approved the August 2014 dividend of $0.1475 per
common share. The dividend will be paid on September 15, 2014, to common
shareholders of record on August 25, 2014. The ex-dividend date is
August 21, 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 July 1, 2014 and ending September 30, 2014, on
AltaGas' outstanding Series A Preferred Shares. The dividend will be
paid on September 30, 2014 to shareholders of record on September 17,
2014. The ex-dividend date is September 15, 2014;
-- The Board of Directors approved a dividend of US$0.275 per share for the
period commencing July 1, 2014 and ending September 30, 2014, on
AltaGas' outstanding Series C Preferred Shares. The dividend will be
paid on September 30, 2014 to shareholders of record on September 17,
2014. The ex-dividend date is September 15, 2014;
-- The Board of Directors also approved a dividend of $0.3125 per share for
the period commencing July 1, 2014, and ending September 30, 2014, on
AltaGas' outstanding Series E Preferred Shares. The dividend will be
paid on September 30, 2014 to shareholders of record on September 17,
2014. The ex-dividend date is September 15, 2014; and
-- The Board of Directors also approved a dividend of $0.2896 per share for
the period commencing July 3, 2014, and ending September 30, 2014, on
AltaGas' outstanding Series G Preferred Shares. The dividend will be
paid on September 30, 2014 to shareholders of record on September 17,
2014. The ex-dividend date is September 15, 2014.
CONSOLIDATED FINANCIAL REVIEW
Three months ended Six months ended
(unaudited) June 30 June 30
($ millions) 2014 2013 2014 2013
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Revenue 471.2 458.6 1,295.0 1,072.1
Net revenue(1) 219.9 211.8 516.5 449.1
Normalized operating income(1) 64.5 68.0 201.6 177.2
Normalized EBITDA(1) 107.3 106.2 286.7 252.1
Net income applicable to common
shares 28.9 35.9 68.8 85.0
Normalized net income(1) 26.8 35.5 100.5 91.1
Total assets 7,197.4 6,704.3 7,197.4 6,704.3
Total long-term liabilities 3,799.8 3,598.9 3,799.8 3,598.9
Net additions to property, plant and
equipment 68.0 715.8 221.7 835.5
Dividends declared(2) 52.1 43.8 99.1 81.8
Cash flows
Normalized funds from
operations(1) 105.8 83.1 235.7 199.2
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($ per share, except shares Three months ended Six months ended
outstanding) June 30 June 30
2014 2013 2014 2013
----------------------------------------------------------------------------
Normalized EBITDA(1) 0.87 0.90 2.33 2.26
Net income - basic 0.23 0.31 0.56 0.76
Net income - diluted 0.23 0.30 0.55 0.74
Normalized net income(1) 0.22 0.30 0.82 0.82
Dividends declared(2) 0.42 0.37 0.81 0.73
Cash flows
Normalized funds from
operations(1) 0.86 0.71 1.92 1.78
Shares outstanding - basic
(millions)
During the period(3) 123.3 117.7 122.9 111.7
End of period 123.6 118.4 123.6 118.4
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(1) Non-GAAP financial measure; see discussion in Non-GAAP Financial
Measures section of the second 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, $0.1275 beginning
July 31, 2013, and $0.1475 beginning on May 26, 2014.
(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 second quarter financial results, progress on construction projects and
other corporate developments.
Members of the media, investment communities and other interested parties may
dial (416) 340-8527 or call toll free at 1-866-852-2121. 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 8670145. The replay expires at
midnight (Eastern) on August 7, 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) 691-7197
media.relations@altagas.ca
www.altagas.ca
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