EPCOR Announces Quarterly Results and 2025 Dividend Increase

EDMONTON, AB, Nov. 1, 2024 /CNW/ - EPCOR Utilities Inc. (EPCOR) today filed its quarterly results for the period ended September 30, 2024.

"EPCOR's operational and financial performance was ahead of expectations for the first nine months of the year," said John Elford, EPCOR President & CEO. "We saw continued growth in the customer base in Canada and the United States, as well as weather-driven increases in water and electricity consumption in multiple markets."

Management's Discussion and Analysis - EPCOR Utilities Inc. For nine months ended Sept. 30, 2024 (CNW Group/Epcor Utilities Inc.)

"EPCOR's teams continued to execute our capital program, with a focus on utility reliability, environmental performance, and customer affordability," Mr. Elford continued. "In the first nine months of 2024, capital expenditures totalled $680 million. Based on the forecast performance of our businesses, the EPCOR dividend is being increased by 4.1% from $193 million in 2024 to $201 million in 2025."

Highlights of EPCOR's financial performance are as follows:

• Net income was $131 million and $339 million for the three and nine months ended September 30, 2024, respectively, compared with net income of $118 million and $266 million for the comparative periods in 2023, respectively. The increase of $13 million and $73 million for the three and nine months ended September 30, 2024, respectively, was primarily due to fair value adjustments related to financial electricity purchase contracts, higher Adjusted EBITDA¹ (as described below), partially offset by lower transmission system access service charge net collections combined with higher depreciation, income tax and finance expenses.
  
  
• Adjusted EBITDA¹ was $326 million and $860 million for the three and nine months ended September 30, 2024, compared with $305 million and $805 million for the comparative periods in 2023, respectively. The increase of $21 million and $55 million for the three and nine months ended September 30, 2024, respectively, was primarily due to higher rates, consumption, customer growth and commercial activity, partially offset by lower commercial construction activity and Energy Price Setting Plan margins combined with higher operating costs.
  
  
• Investment in capital projects was $680 million for the nine months ended September 30, 2024, compared with $687 million for the corresponding period in 2023.

Interim management's discussion and analysis and the unaudited condensed consolidated interim financial statements are available on EPCOR's website (www.epcor.com) and SEDAR+ (www.sedarplus.ca).

EPCOR builds, owns and operates electrical, natural gas and water transmission and distribution networks, water and wastewater treatment facilities, and sanitary and stormwater systems in Canada and the United States. EPCOR also provides electricity, natural gas and water products and services to residential and commercial customers. EPCOR, headquartered in Edmonton, is committed to conducting its business and operations safely and responsibly. Environmental stewardship, public health and community well-being are at the heart of EPCOR's mission to provide clean water and safe, reliable energy. EPCOR is one of Alberta's Top 80 Employers, is ranked among Corporate Knights' 2024 Best 50 Corporate Citizens in Canada and is designated a Utility of the Future Today by the Water Environment Federation.

Appendix 1 Non-GAAP Financial Measures

EPCOR uses earnings before finance expenses, income tax recovery (expense), depreciation and amortization, changes in the fair value of derivative financial instruments, transmission system access service charge net collections and other unusual items (collectively, Adjusted EBITDA) to discuss operating results for EPCOR's lines of business. Adjusted EBITDA is a non-GAAP financial measure and is not a standardized financial measure under IFRS and might not be comparable to similar financial measures disclosed by other issuers.

The reconciliation between Adjusted EBITDA to Net income as reported under IFRS Accounting Standards is shown below:

($ millions)	Three months ended September 30,		Nine months ended September 30,
	2024	2023 (restated)^1	2024	2023 (restated)^1
Adjusted EBITDA by Segment
Water Services segment	$          145	$          124	$          374	$           332
Distribution and Transmission segment	76	72	217	194
Energy Services segment	13	19	41	47
North American Commercial Services segment	26	28	67	85
U.S. Regulated Water segment	62	56	137	127
Other	4	6	24	20
Adjusted EBITDA	326	305	860	805
Finance expenses	(52)	(46)	(153)	(140)
Income tax expense	(11)	(6)	(26)	(8)
Depreciation and amortization	(115)	(107)	(327)	(317)
Change in fair value of financial electricity purchase    contracts^2	(1)	(29)	6	(85)
Transmission system access service charge net    collections^3	(16)	1	(21)	11
Net income	$         131	$          118	$          339	$           266

1.	During the fourth quarter of 2023, the Company realigned its operating segments to reflect the results of an internal reorganization. The reorganization resulted in the formation of a new operating segment, North American Commercial Services, which combines certain previously existing businesses in a new reportable segment. Comparative segmented results for 2023 have been restated to align with the 2024 reportable segment presentation.
2.	The change in fair value of derivative financial instruments represents the change in fair value of financial electricity purchase contracts between the electricity market forward prices and the contracted prices at the end of the reporting period, for the contracted volumes of electricity.
3.	Transmission system access service charge net collections is the difference between the transmission system access service charges paid to the provincial system operators and the transmission system access service charges collected from electricity retailers. Transmission system access service charge net collections are timing differences, which are collected from or returned to electricity retailers as the transmission system access service charges and customer billing determinants are finalized.

SOURCE Epcor Utilities Inc.

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