EPCOR Announces Quarterly Results

EDMONTON, AB, May 2, 2023 /CNW/ - EPCOR Utilities Inc. (EPCOR) today filed its quarterly results for the period ended March 31, 2023.

EPCOR Announces Quarterly Results (CNW Group/Epcor Utilities Inc.)

"First quarter operational and financial performance met expectations across EPCOR's operations, with strong growth in EPCOR's geographies and in the company's commercial projects," said Stuart Lee, EPCOR President & CEO. "More than $180 million was invested in capital projects to sustain reliable utility service and support community growth, and we recorded $391 million in construction revenues for commercial water projects.  EPCOR has a strong position as a North American leader across the water-cycle – sought out by communities and commercial partners for our expertise in water supply and treatment, and water reclamation. 

"Today's Annual General Meeting (AGM) marks the release of EPCOR's 2022 ESG Performance Update," added Mr. Lee. "We continue to build momentum on our sustainability journey, advancing our performance towards the targets we set in our 2020 Leading for the Future ESG report. The AGM also marks our leadership transition. As we prepared for my retirement, I worked closely with incoming-President and CEO John Elford, the leadership team, and the Board to prepare for a smooth transition. I would like to thank each one of the 3,500 members of Team EPCOR for their commitment to our purpose, and I look forward to the company's continued success."

Highlights of EPCOR's financial performance are as follows:

• Net income was $46 million for the three months ended March 31, 2023, compared with net income of $74 million for the comparative period in 2022. The decrease of $28 million for the three months ended March 31, 2023, was primarily due to fair value adjustments related to financial electricity purchase contracts, higher depreciation and finance expenses in 2023, partially offset by higher Adjusted EBITDA, as described below.
• Adjusted EBITDA¹ was $242 million for the three months ended March 31, 2023, compared with $209 million for the comparative period in 2022. The increase of $33 million for the three months ended March 31, 2023 was primarily due to higher rates and customer growth and higher construction margins, partially offset by higher staff costs.
• Investment in capital projects was $183 million for the three months ended March 31, 2023, compared with $167 million for the corresponding period in 2022, primarily due to higher spending in EPCOR's Distribution and Transmission segment and U.S. Operations segment, partially offset by lower capital spending in EPCOR's Water Services segment.

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.sedar.com).

EPCOR, through its wholly owned subsidiaries, builds, owns and operates electrical, natural gas and water transmission and distribution networks, water and wastewater treatment facilities, 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 an Alberta Top 75 employer and is ranked among Corporate Knights' 2022 Best 50 Corporate Citizens in Canada.

1. Adjusted EBITDA is a non-GAAP financial measure.  See the Non-GAAP Financial Measures section in Appendix 1 to this media release.

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 is shown below:

(Unaudited, $ millions)
Three months ended March 31,		2023	2022
Adjusted EBITDA by Segment
Water Services segment		$            96	$             83
Distribution and Transmission segment		61	60
Energy Services segment		22	21
U.S. Operations segment		51	33
Other		12	12
Adjusted EBITDA		242	209
Other income		2	-
Finance expenses		(47)	(37)
Income tax recovery (expense)		8	(4)
Depreciation and amortization		(100)	(91)
Change in fair value of financial electricity purchase contracts^(1)		(71)	(6)
Transmission system access service charge net collections^(2)		12	3
Net income		$            46	$             74

1.

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.

2.

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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