Le Lézard
Classified in: Business
Subject: ERN

ATCO Reports Third Quarter 2019 Earnings


CALGARY, Oct. 31, 2019 /CNW/ - ATCO Ltd. (TSX: ACO.X, ACO.Y)

ATCO today announced third quarter 2019 adjusted earnings of $74 million, or $0.65 per share, compared to $87 million, or $0.76 per share, in the third quarter of 2018. Lower third quarter earnings recorded in Canadian Utilities and ATCO Investments were partially offset by higher earnings in Structures & Logistics and Neltume Ports.

Structures & Logistics achieved $10 million in higher earnings in the third quarter of 2019 compared to the same period in 2018, mainly due to strong earnings from the LNG Canada Cedar Valley Lodge project, and space rental fleet earnings.

Neltume Ports contributed $2 million in higher earnings in the third quarter of 2019 compared to the same period in 2018. On September 12, 2018, ATCO invested in a 40 per cent interest of Neltume Ports, a leading port operator and developer in South America.

Canadian Utilities recorded $13 million in lower third quarter 2019 earnings compared to the same period in 2018, mainly due to favorable earnings realized in 2018 associated with the Balancing Pool's termination of the Battle River unit 5 PPA and associated availability incentive and performance payments.

ATCO Corporate & Other recorded $12 million in lower third quarter 2019 earnings mainly due to lower income from ATCO Investments, which completed two commercial real estate transactions in the third quarter of 2018.

RECENT DEVELOPMENTS

Structures & Logistics

Neltume Ports

Canadian Utilities

Corporate

FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED EARNINGS

A financial summary of the consolidated subsidiaries of ATCO and a reconciliation of adjusted earnings to earnings attributable to Class I and Class II Shares is provided below:


For the Three Months
Ended September 30

For the Nine Months
Ended September 30

($ millions except share data)

2019

2018

2019

2018

Consolidated adjusted earnings (1)

74

87

264

247

Gain on sale of operations (2)

77

?

73

?

Transaction costs (2)

?

?

(1)

?

Proceeds from termination of PPA (2)

?

19

?

19

Restructuring and other costs (2)

?

?

?

(39)

Unrealized gains on mark-to-market forward and swap commodity contracts (2)

1

18

1

15

Rate-regulated activities (2) (3)

9

(10)

102

(49)

IT Common Matters decision (2)

(1)

?

(9)

?

Other (2) (4)

?

1

?

?

Earnings attributable to Class I and Class II Shares

160

115

430

193

Weighted average shares outstanding (millions of shares)

114.4

114.4

114.4

114.4



(1)

Adjusted earnings are earnings attributable to Class I and Class II Shares after adjusting for the timing of revenues and expenses associated with rate-regulated activities and unrealized gains or losses on mark-to-market forward and swap commodity contracts. Adjusted earnings also exclude one-time gains and losses, significant impairments, and items that are not in the normal course of business or a result of day-to-day operations. Adjusted earnings present earnings on the same basis as was used prior to adopting International Financial Reporting Standards (IFRS) - that basis being the U.S. accounting principles for rate-regulated entities - and they are a key measure used to assess segment performance, to reflect the economics of rate regulation and to facilitate comparability of ATCO's earnings with other Canadian rate-regulated companies

(2)

Refer to Note 4 of the Unaudited Interim Consolidated Financial Statements for the nine months ended September 30, 2019 for detailed descriptions of this adjustment and others.

(3)

In the second quarter of 2019, the Government of Alberta enacted a phased decrease in the provincial corporate income tax rate from 12 per cent to 8 per cent. This decrease is being phased in increments from July 1, 2019 to January 1, 2022. As a result of this change, the Alberta Utilities decreased deferred income taxes and increased earnings in the second quarter of 2019 by $106 million.

(4)

Each quarter, the Company adjusts the deferred tax asset which was recognized as a result of the Tula Pipeline Project impairment. The adjustment is due to a difference between the tax base currency, which is the Mexican peso, and the U.S. dollar functional currency.

 

TELECONFERENCE AND WEBCAST

ATCO will hold a live teleconference and webcast to discuss our third quarter 2019 financial results. Dennis DeChamplain, Executive Vice President & Chief Financial Officer, will discuss third quarter 2019 financial results and recent developments at 9:30 am Mountain Time     (11:30 am Eastern Time) on Thursday, October 31, 2019 at 1-800-319-4610. No pass code is required. Opening remarks will be followed by a question and answer period with investment analysts. Participants are asked to please dial-in 10 minutes prior to the start of the call and request to join the ATCO teleconference.

Management invites interested parties to listen via live webcast at: https://www.atco.com/en-ca/about-us/investors/events-presentations.html

A replay of the teleconference will be available approximately two hours after the conclusion of the call until November 30, 2019. Please call 1-800-319-6413 and enter pass code 3710. An archive of the webcast will be available on October 31, 2019 and a transcript of the call will be posted on https://www.atco.com/en-ca/about-us/investors/events-presentations.html within a few business days.

This news release should be used as preparation for reading the full disclosure documents. ATCO's unaudited interim consolidated financial statements and management's discussion and analysis for the nine months ended September 30, 2019 will be available on the ATCO website (www.ATCO.com), via SEDAR (www.sedar.com) or can be requested from the Company.

With approximately 6,000 employees and assets of $23 billion, ATCO is a diversified global holding corporation with investments in Structures & Logistics (workforce housing, innovative modular facilities, construction, site support services, and logistics and operations management); Energy Infrastructure (electricity generation, transmission, and distribution; natural gas transmission, distribution and infrastructure development; energy storage and industrial water solutions; and electricity and natural gas retail sales); Transportation (ports and transportation logistics); and Commercial Real Estate. More information can be found at www.ATCO.com.

Forward-Looking Information:

Certain statements contained in this news release may constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "estimate", "expect", "may", "will", "intend", "should", and similar expressions.

Forward-looking information involves 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 information.

The Company's actual results could differ materially from those anticipated in this forward-looking information as a result of regulatory decisions, competitive factors in the industries in which the Company operates, prevailing economic conditions, and other factors, many of which are beyond the control of the Company.

The Company believes that the expectations reflected in the forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.

Any forward-looking information contained in this news release represents the Company's expectations as of the date hereof, and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.

SOURCE ATCO Ltd.


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