November 18, 2009 - Financial releases
Favourable competitive situation for natural gas and diversity of operations contribute to strong financial performance
Montreal, November 18, 2009 – Gaz Métro Limited Partnership (TSX: GZM.UN, Gaz Métro) ends its 2009 fiscal year with adjusted net income of $159.6 million, or $1.32 per unit, which is $6.3 million, or $0.05 per unit higher than the previous fiscal year.1
“We are proud to report solid financial results to our Partners. Even though Gaz Métro is not immune to the vagaries of the global economic situation, it is doing quite well in these turbulent times. Relying on its commercial agility, the Partnership has taken full advantage of business opportunities provided by the competitive position of natural gas in Quebec for several quarters, in particular in the industrial market where it has dislodged heavy fuel oil. In 2009, Gaz Métro also reaped the rewards of its prudent targeted diversification strategy of its markets and activities”, said Sophie Brochu, President and Chief Executive Officer.
“Our interest in the Trans Québec & Maritimes Pipeline transmission system, for which the National Energy Board approved a substantial adjustment of the rate of return on equity during the fiscal year, was an important contributor to our strong performance in 2009. This is also true of Green Mountain Power Corporation, the second largest electricity distributor in Vermont that we acquired in 2007, which itself generated net income before financing costs of $15.7 million, representing nearly 10% of our net income”, added Sophie Brochu.
“Following our strategy of investing in complementary infrastructure, we are resolutely pursuing our wind power projects. This year, these projects received the environmental permits they required to go ahead, thereby reaching another milestone towards making long-term value a reality for our Partners”, concluded Sophie Brochu.
Income Distribution
Gaz Métro distributed $0.31 per unit in each quarter of the 2009 fiscal year, for a total of $1.24 per unit, the same level as in the 2008 fiscal year. It also paid a distribution of $0.31 per unit to Partners last October 1.
Gaz Métro today declared a distribution of $0.31 per unit, payable on January 5, 2010, to Partners of record at the close of business on December 15, 2009. Gaz Métro expects to pay distributions of $0.31 per unit in each quarter of the 2010 fiscal year.
Segment Analysis
Vermont Energy Distribution
Net income from Vermont Energy Distribution was up $5.1 million2 for the 2009 fiscal year, in spite of lower electricity volumes distributed by Green Mountain Power Corporation (GMP). This solid performance is due, among other things, to the increase in revenues from GMP’s interest in Vermont Transco LLC, which transports electricity, the appreciation of the U.S. dollar in relation to the Canadian dollar and higher natural gas deliveries by Vermont Gas Systems, Inc. (VGS) as a result of relatively colder temperatures than the previous fiscal year.
Quebec Natural Gas Distribution (Gaz Métro-QDA)
In Quebec during the 2009 fiscal year, Gaz Métro-QDA signed 6,196 new contracts, bringing the number of customers to 179,370 as at September 30, 2009. The new housing penetration rate of natural gas was 19% in the Greater Montreal area. New customer satisfaction rate in Quebec remained high at 92%.
The main reason for the 1.8% reduction in natural gas volumes in the residential market was energy conservation initiatives. Gaz Métro encourages those initiatives through energy efficiency programs while keeping investors’ expectations in mind. In accordance with its regulatory framework, Gaz Métro-QDA therefore received the total performance incentive of $4.0 million in 2009, as it did in 2008, from the achievement of its corporate energy efficiency objectives.
In the commercial market, the economic recession was the main contributor to the 3.0% reduction in natural gas volumes compared to last year. The 19.9% volume reduction in the industrial market during the 2009 fiscal year was mainly in the metallurgy, refining, petrochemical and electricity production sectors.
Overall, Gaz Métro-QDA’s net income was down $7.2 million, mainly on account of the 0.58% reduction in the rate of return, including anticipated productivity gains, authorized for the 2009 fiscal year compared to the 2008 fiscal year and the reduction in income and capital taxes, which are included in rates charged to customers and subsequently assumed by the Partners. These items are partially offset by the increase in the share of the overearnings arising mainly as a result of higher revenues from short-term interruptible service sales at higher average prices than during the previous fiscal year due to the more favourable competitive position of natural gas compared to heavy fuel oil.
Transportation of Natural Gas
Net income from the Transportation segment was up $0.3 million for the 2009 fiscal year, mainly because of the recognition, in the second quarter, of the retroactive $6.7 million favourable impact of a rate adjustment the National Energy Board approved on March 19, 2009 for Trans Québec & Maritimes Pipeline Inc. (TQM) for its 2007 and 2008 fiscal years, as well as interest income of $0.8 million related to that rate adjustment. These favourable items are mitigated by lower earnings in Portland Natural Gas Transmission System (PNGTS) and the non-recurring $5.3 million after-tax gain recorded in PNGTS during the 2008 fiscal year in connection with the partial settlement of the bankruptcy of Calpine Corporation, one of its former large customers.
Storage of Natural Gas
Adjusted net income3 for the Storage segment was up $1.1 million for the 2009 fiscal year, mainly on account of a slight indexing of rates and a reduction in financial expenses, reflecting lower interest rates.
Energy Services and Other
Adjusted net income3 for the Energy Services segment was up $6.6 million for the 2009 fiscal year, mainly because of improved profitability for some subsidiaries of Gaz Métro Plus Limited Partnership, including Consulgaz Inc., Climatisation et Chauffage Urbains de Montréal, s.e.c. and HydroSolution L.P.
Development Projects
In connection with the Seigneurie de Beaupré wind power projects, on July 7, 2009, Gaz Métro and its partner, Boralex Inc., obtained a decree from the Government of Quebec, on the recommendation of the provincial ministry of natural resources (ministère des Ressources naturelles et de la Faune), authorizing two projects with a total installed capacity of 272 megawatts. The two wind farms should be put in service no later than December 1, 2013 on Seigneurie de Beaupré lands, which are owned by the Séminaire de Québec. Having achieved this important environmental milestone, the consortium may now proceed with the other planned stages of the projects.
In terms of the natural gas supply diversification initiatives, the timetable for the proposed liquefied natural gas terminal has been extended as external factors and uncertainties in the financial, commodity and construction markets have slowed discussions between the project’s partners and Gazprom Marketing & Trading USA, Inc. In Gaz Métro’s view, a correction in the economic situation is to be expected, but it does not foresee the signing of final agreements in the short term.
Quarterly Results
Given the seasonal nature of its operations and the normally low demand for energy during the summer months, Gaz Métro has always incurred a loss during the fourth quarter of its fiscal year. The adjusted net loss3 for the fourth quarter of the 2009 fiscal year is $36.7 million, compared to $39.5 million for the corresponding period of the previous fiscal year, an improvement of $2.8 million. The adjusted net loss per unit is $0.31 in the fourth quarter of the 2009 fiscal year, compared to $0.32 in the fourth quarter of the previous fiscal year, an improvement of $0.01 per unit.
March 27, 2018 - Press releases
The Québec government’s 2018-2019 budgetJanuary 26, 2018 - Press releases
The City of Saint-Hyacinthe and Énergir offer a vision made real: Local, renewable natural gas available in Énergir's networkPublic Affairs and Communications:
Tel: 514 598 3449
Toll-free: 1-866-598-3449
communications@gazmetro.com
Available at all time in case of an emergency.
Need more information?
Contact us!
By phone at 1 855 393-1313 or by email.