Valener announces its results for the first quarter of fiscal 2015 and raises its dividend by 4%



  • Dividend increased 4% on an annualized basis, rising from $1.00 to $1.04 per common share ($0.26 per quarter);
  • Annual dividend growth target set at 4% for the next three fiscal years;
  • 44% increase in normalized operating cash flows, rising from $0.18 to $0.26 per common share;
  • Seigneurie de Beaupré Wind Farms:
    • Wind Farm 4: Start-up on December 1, 2014, on schedule and within budget;
    • Wind Farms 2 and 3: Production has exceeded expectations due to favourable winds.

Gaz Métro

  • Liquefied natural gas: Sales growth;
  • Green Mountain Power: The plan to achieve synergies through the integration of Central Vermont Public Service's operations is meeting its financial targets and is proceeding according to schedule;
  • A decrease in net income stemming from lower natural gas deliveries to Quebec's industrial market caused, among other factors, by warmer temperatures.


MONTREAL, Feb. 12, 2015 /CNW Telbec/ - Valener Inc. (Valener) (TSX: VNR), the public investment vehicle in Gaz Métro Limited Partnership (Gaz Métro), is today announcing its financial results.

For the first quarter of fiscal 2015, Valener recorded normalized operating cash flows of $9.9 million or $0.26 per common share, an increase of 44.4% or $0.08, from $6.7 million and $0.18 per common share recorded in the first quarter of fiscal 2014.

Thanks to Gaz Métro's financial strength, the sustained performance of wind farms 2 and 3 since they began commercial operations, and the December 2014 commercial start-up of wind farm 4, Valener's board of directors declared a 4% dividend increase on an annualized basis, i.e., rising from $1.00 to $1.04 per common share. As such, the quarterly dividend payable on April 15, 2015 to shareholders of record at the close of business on March 31, 2015 will be $0.26 per common share. In addition, the board of directors set an annual dividend growth target of 4% for the next three fiscal years.

"The solid performance delivered by the wind farms for over a year is testament to the quality of our investment and to the sustainability of the forthcoming distributions from these assets. Such performance, combined with the strength of our investment in Gaz Métro, supports our goal of raising the dividend by 4% per year. We are very happy to be sharing this success with our shareholders," said Pierre Monahan, Chairman of Valener's board of directors.

For the first quarter of fiscal 2015, recurring net income attributable to common shareholders totalled $16.4 million, up $0.6 million ($0.01 per common share) compared with the same period last year.

Seigneurie de Beaupré Wind Farms

Wind Farms 2 and 3

Installed capacity

272 MW

Complete start-up

 Dec. 2013

Total investment




Gaz Métro



These wind farms generated 234,655 megawatthours during the first quarter of fiscal 2015. The commercial operation of these wind farms is going as planned, and the favourable winds experienced have helped to generate $18.5 million in operating cash flows. A portion of these cash flows, as well as a portion of those accumulated during last fiscal year, are expected to be distributed to Valener and Gaz Métro during the second quarter of fiscal 2015.

Wind Farm 4

Installed capacity

68 MW

Dec. 2014

Total investment




Gaz Métro



As scheduled and within budget, this wind farm began commercial operations on December 1, 2014.

Summary of Valener's results

For the first quarter ended December 31

(in millions of dollars, unless otherwise indicated)



Net income attributable to common shareholders



Recurring net income attributable to common shareholders (1)



Per common share (in $)



Normalized operating cash flows (1)



Per common share (in $)




These measures are financial measures not defined in Canadian generally accepted accounting principles (GAAP).
The recurring net income attributable to common shareholders excludes the non-recurring items of Valener and the share in the non-recurring items of Gaz Métro, net of income taxes. Normalized operating cash flows are cash flows related to operating activities less dividends paid to preferred shareholders.


Gaz Métro


Liquefied natural gas (LNG)

As a result of higher LNG deliveries in the first quarter of fiscal 2015, Gaz Métro LNG posted a $2.0 million year-over-year increase in its first-quarter income before income taxes.

"Given the robust demand for LNG, we anticipate appreciable growth for this form of energy in the years ahead. It is already generating value for our shareholders and, given the forthcoming investments to our Montreal-East liquefaction plant, we'll be able to tap the full potential of LNG," said Sophie Brochu, President and Chief Executive Officer of Gaz Métro.

U.S. Activities

Continued investments in Green Mountain Power's (GMP) rate base

In December 2014, GMP invested $26.6 million in its entity subject to significant influence, Vermont Transco LLC (Transco), which is active in electricity transmission. With this investment, combined with the December 2013 investment of $24.4 million, GMP has increased its rate base and can therefore generate additional net income for the first quarter of fiscal 2015 versus the first quarter of 2014.

Greater efficiency in electricity distribution operations in Vermont

During the first quarter of fiscal 2015, GMP continued, as planned, to merge its operations with those of Central Vermont Public Service (CVPS) such that it and its customers may continue to benefit from the resulting efficiencies and synergies.

For fiscal 2015, GMP expects to be able to achieve sufficient synergies to reach the US$8.0 million attributable to its customers.

Development project for the natural gas distribution system in Vermont

As at December 31, 2014, an amount of US$50.5 million had been invested in Phase I of the Vermont Gas Systems, Inc. (VGS) system development project, which will extend natural gas distribution service to the communities of Vergennes and Middlebury in Addison County.

In December 2014, VGS submitted a Phase I cost update to the Vermont Public Service Board (VPSB) showing that the estimated costs now stand at US$153.6 million. At this time, Phase I is expected to come into service during fiscal 2016. The project continues to be viewed as a beneficial solution for the State of Vermont. Aside from the environmental advantages, natural gas remains a competitive energy source compared to other sources of fossil fuel.

As for Phase II, which consists of extending the natural gas distribution service to International Paper Company (IP) in New York State, in February 2015, given the current business conditions and following VGS's budget review for this phase, IP has notified VGS of its decision to terminate their contract.

Financial Results

For the first quarter of fiscal 2015, recurring net income attributable to the Partners of Gaz Métro totalled $72.6 million, down $3.2 million from $75.8 million in the first quarter of last year.

The higher net income generated by Gaz Métro LNG upon the performance of short-term LNG supply contracts combined with a favourable exchange rate impact on the net income generated by U.S. business operations were not enough to offset the drop in natural gas and electricity deliveries in Quebec and Vermont resulting particularly from temperatures not as cold as those  experienced during the same period last fiscal year.

Gaz Métro's segment results – Net income attributable to Partners, excluding non-recurring items

For the first quarter ended December 31

(in millions of dollars)




Energy Distribution 

Gaz Métro-QDA




GMP and VGS (1)







Natural Gas Transportation (1)




Energy Production (1)




Energy Services, Storage and Other (1)




Corporate Affairs (1)




Net income attributable to Partners, excluding non-recurring items (2)




Non-recurring items




Net income attributable to Partners





Net of financing costs of investments in this segment. These costs consist of the interest on the long-term debt incurred by Gaz Métro to finance investments in the subsidiaries, joint ventures and entities subject to significant influence of each segment.


This measure is a non-GAAP financial measure.


Performance in the Energy Distribution segment

Natural gas distribution in Quebec (Gaz Métro-QDA)

Rate base

Authorized return

Distribution network
~10,000 km



For the first quarter of fiscal 2015, Gaz Métro-QDA recorded net income of $53.0 million, a $3.8 million year-over-year decrease that was essentially due to:

  • an unfavourable difference of $2.4 million, anticipated in the 2015 rate case, related to a timing difference between the revenue recognition profile and that of costs, which is expected to reverse during fiscal 2015;
  • lower distribution revenues resulting mainly from lower deliveries in the industrial market; and
  • higher financial expenses.

It is important to note that, on an annual basis, the fiscal 2015 rate case, as submitted to the Régie de l'énergie, translates into a $2.5 million increase in net income when compared to the net income generated during fiscal 2014, reflecting an increase in the average rate base and in capitalized interest on non-rate-base investments.

Energy distribution in Vermont



Rate base

Authorized return


Rate base

Authorized return



For the first quarter of fiscal 2015, the net income generated by the energy distribution business in Vermont totalled $15.9 million, down $0.2 million from the first quarter of last year.

The main factors underlying this decrease were:

  • a decrease in GMP's electricity deliveries resulting, among other factors, from warmer temperatures in the first quarter of fiscal 2015 when compared to the same period of fiscal 2014;

partly offset by:

  • a favourable exchange rate impact from the appreciation of the U.S. dollar against the Canadian dollar;
  • the impact of GMP's higher rate base resulting, among other factors, from additional investments in Transco; and
  • the impact of an increase in return-generating non-rate-base investments in VGS's system development projects.

Performance of other segments

In the Natural Gas Transportation segment, net income totalled $3.9 million, a slight, $0.2 million year-over-year decrease.

This decrease stems mainly from an unfavourable impact of a lower rate base for Trans Québec & Maritimes Pipeline (TQM), offset by an increase, net of income taxes, in the share of the income of Portland Natural Gas Transmission System (PNGTS), reflecting the higher transported volumes related to the signing of new short-term contracts.

The Energy Production segment consists of the non-regulated energy production business of wind farms 2 and 3 and wind farm 4, which are jointly owned by Gaz Métro, Valener and Boralex Inc. on the private lands of Seigneurie de Beaupré.

For this segment, net income totalled $0.6 million, a $0.2 million year-over-year decrease that came mainly from a net unfavourable impact of changes in the ineffectiveness of swaps and from a higher income tax expense, partly offset by an increase in the revenues generated by wind farms 2 and 3, which began operations at the end of 2013.

Wind farm 4 had a negligible impact on the segment's net income, as it began operations only in December 2014.

In the Energy Services, Storage and Other segment, first-quarter net income totalled $1.3 million, a $1.5 million year-over-year increase driven mainly by growth in Gaz Métro LNG's net income upon the performance of short-term LNG supply contracts.

Conference call

Valener will hold a conference call with financial analysts today at 3:00 pm (Eastern Time) to discuss its results and those of Gaz Métro for the first quarter ended December 31, 2014.

The call will be broadcast live and is accessible by dialling 647-427-7450 or toll-free 1-888-231-8191. For 30 days afterward, a rebroadcast will be accessible by dialling 416-849-0833 or toll-free 1-855-859-2056 (access code: 62162851). It will also be available via webcast on Valener's website ( in the Events and Presentations page of the Investors section and can be heard during the 90 days following the initial call.

Overview of Valener

Valener is a public company that is 100% owned by the public investor and serves as the investment vehicle in Gaz Métro. Through its investment in Gaz Métro, Valener offers its shareholders a solid investment in a diversified and largely regulated energy portfolio in Quebec and Vermont. As a strategic partner, Valener, on one hand, contributes to Gaz Métro's growth, and on the other hand invests in wind power production in Quebec together with Gaz Métro. Valener favours energy sources and uses that are innovative, clean, competitive and profitable. Valener's common shares and preferred shares are listed on the Toronto Stock Exchange under the "VNR" trading symbol for common shares and under the "VNR.PR.A" symbol for Series A preferred shares.

Overview of Gaz Métro

With more than $6 billion in assets, Gaz Métro is a leading energy provider. It is the largest natural gas distribution company in Quebec, where its network of over 10,000 km of underground pipelines serves 300 municipalities and more than 195,000 customers. Gaz Métro is also present in Vermont, producing electricity and distributing electricity and natural gas to meet the needs of more than 305,000 customers. Gaz Métro is actively involved in the development and operation of innovative, promising energy projects such as the production of wind power, the use of natural gas as a transportation fuel and the development of biomethane. Gaz Métro is a major energy sector player that takes the lead in responding to the needs of its customers, regions and municipalities, local organizations and communities while also satisfying the expectations of its Partners (Gaz Métro inc. and Valener) and employees.

Cautionary note regarding forward-looking statements

This press release may contain forward-looking information within the meaning of applicable securities laws. Such forward-looking information reflects the intentions, plans, expectations and opinions of the management of Gaz Métro inc. (GMi), in its capacity as General Partner of Gaz Métro, acting as manager of Valener (the management of the manager), and is based on information currently available to the management of the manager and assumptions about future events. Forward-looking statements can often be identified by words such as "plans," "expects," "estimates," forecasts," "intends," "anticipates" or "believes" or similar expressions, including the negative and conjugated forms of these words. Forward-looking statements involve known and unknown risks and uncertainties and other factors beyond the control of the management of the manager. A number of factors could cause the actual results of Valener or of Gaz Métro to differ significantly from historical results or current expectations, as described in the forward-looking statements, including but not limited to the general nature of the aforementioned, terms of decisions rendered by regulatory agencies, uncertainty about obtaining approvals from regulatory agencies and interested parties to carry out activities in Gaz Métro's various business segments and the socio-economic risks associated with such activity, the competitiveness of natural gas in relation to other energy sources in the context of falling global oil prices, the reliability or costs of natural gas supply and electricity supply, the integrity of the natural gas and electricity distribution systems, the evolution and profitability of Seigneurie de Beaupré Wind Farms 2 and 3 General Partnership (Wind Farms 2 and 3) and Seigneurie de Beaupré Wind Farm 4 General Partnership (Wind Farm 4) and other development projects, the ability for Valener to generate sufficient cash to support its anticipated target annual dividend growth rate on its common shares, the ability to complete attractive acquisitions and the related financing and integration aspects, the ability to complete new development projects, the ability to secure future financing, general economic conditions, exchange rate and interest rate fluctuations, weather conditions and other factors described in the Risk Factors Relating to Valener section and in the Risk Factors Relating to Gaz Métro section of Valener's Management's Discussion and Analysis for the fiscal year ended September 30, 2014 and in Valener's and Gaz Métro's disclosure filings. Although the forward-looking statements contained herein are based on what the management of the manager believes to be reasonable assumptions, in particular assumptions to the effect that no unforeseen changes in the legislative and regulatory framework of energy markets in Quebec and in the New England states will occur; that the applications filed with the Régie de l'énergie will be approved as submitted; that natural gas prices will remain competitive; that the supply of natural gas and electricity will be maintained or will be available at competitive costs; that no significant event occurring outside the ordinary course of business, such as a natural disaster or other calamity, will occur; that Gaz Métro will be able to continue distributing substantially all of its net income (excluding non-recurring items); that Wind Farms 2 and 3 and Wind Farm 4 will be able to make distribution payments to their partners; that Valener will be able to generate sufficient cash to support its anticipated target annual dividend growth rate on its common shares; that GMP will be able to continue to quickly and effectively integrate CVPS's operations; that liquidity needs for Gaz Métro's development projects will be obtained through a combination of operating cash flows, borrowings on credit facilities, capital injections from Partners, and issuances of debt securities; and that the subsidiaries will obtain the required authorizations and funds needed to finance their development projects; in addition to the other assumptions described in Valener's MD&A for the quarter ended December 31, 2014, the management of the manager cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of this date, and the management of the manager assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws. These statements do not reflect the potential impact of any unusual item or any business combination or other transaction that may be announced or that may occur after the date hereof. Readers are cautioned to not place undue reliance on these forward-looking statements.


SOURCE Valener Inc.

For further information: Investors and Analysts: Caroline Warren, Investor Relations, 514-598-3324; Media: Marie-Christine Demers, Public Affairs and Communications, 514-598-3449,,, Photos, videos (b-roll) and logos are available in Gaz Métro's Multimedia library; Marc Poisson, NATIONAL Public Relations, 514-843-2366


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