Earnings per share decreased to $0.07 in Q2 2015 (Q2 2014: $0.17) and year-to-date earnings per share decreased to $1.17(YTD 2014, $1.59), primarily as a result of mark-to-market changes in the trading and marketing business.
Emera announced a 19% increase in its annual common share dividend to $1.90 from $1.60.
Annual dividend growth target increased to 8% through 2019.
“Emera continues to deliver solid growth in adjusted earnings” said Chris Huskilson, President and CEO of Emera Inc. “This record of growth and the results of a recently completed long-term strategic review of the business led the Board of Directors to approve a 19% increase in our common share dividend, and an increase in our annual dividend growth target to 8% per year through 2019.”
Consolidated Financial Highlights (in millions of $CAD, except per share amounts)
Three months ended
Six months ended
Net income attributable to common shareholders
After-tax mark-to-market gain (loss)
Adjusted net income attributable to common shareholders(1)*
Earnings per common share – basic
Adjusted earnings per common share – basic(1)*
Dividends per common share declared
Total Assets (as at June 30)
Weighted average shares of common stock outstanding – basic (millions of shares for the three months ended June 30)
*Adjusted EBITDA(1), Adjusted net income(1) and Adjusted earnings per common share(1) excludes the effect of mark-to-market adjustments.
Operating revenues decreased 5.2% to $537.0 million in Q2 2015 compared to the same period last year. The decrease was primarily due to mark-to-market changes and reduced revenue at the New England gas generating facilities and BLPC. The decrease was partially offset by increased revenues at Nova Scotia Power as a result of recovery of prior years’ fuel costs and load growth.
Cash flow from operations decreased 8.3% to $376.0 million for the six months ending June 30th 2015 compared to the same period last year. The decrease was primarily due to lower trading and marketing margin, demand side management program costs deferred at NSPI and increased investment in non-cash working capital.
Adjusted net income(1) increased $3.8 million to $48.0 million in Q2 2015 (Q2 2014: $44.2 million), primarily due to higher contributions from Emera Maine and the impact of stronger USD, partially offset by the BLPC restructuring costs.
After-tax mark-to-market adjustments negatively affected net income by $38.0 million or $0.26 per common share in Q2 2015 and $19.7 million or $0.14 per common share in Q2 2014, primarily due to the reversal of mark-to-market losses in 2014 and changes in gas and power contract positions.
Items Affecting the Quarter
Barbados Light & Power Company Limited (BLPC) Restructuring Costs
In Q2 2015, BLPC recorded severance costs relating to corporate restructuring. The after-tax effect on Emera’s Consolidated Net Income was $5.4 million or $0.04 per common share. These costs have been expensed, and upon completion of its regulatory filing, BLPC intends to defer these costs.
Emera reports its results in six operating segments: Nova Scotia Power, Emera Maine, Emera Caribbean, Pipelines, Emera Energy, and Corporate & Other.
Adjusted Net Income(1)
Nova Scotia Power Inc.
Corporate & Other
Adjusted EPS (basic)(1)
*Adjusted net income(1) excludes after-tax mark-to-market loss in Emera Energy and Pipelines of $38.0 million (Q2 2014, after-tax mark-to-market loss of $19.7 million).
Nova Scotia Power Inc.’s net income was $16.9 million in Q2 2015, a decrease of $0.2 million from the $17.1 million in Q2 2014. NSPI’s earnings for the full year are expected to grow modestly compared to 2014.
Emera Maine contributed $13.7 million to consolidated net income in Q2 2015, an increase of $6.7 million compared to Q2 2014 net income of $7.0 million. The higher net income was primarily due to transmission revenue adjustments, changes in the FERC transmission rate refund and the impact of a stronger USD.
Emera Caribbean’s net income of $4.8 million in Q2 2015 represents a decrease of $3.0 million compared to Q2 2014 income of $7.8 million. The decrease was primarily due to corporate restructuring costs at BLPC, partially offset by payroll cost savings and reduced maintenance costs.
Pipelines’ net income, adjusted to exclude mark-to-market impacts, was $9.3 million in Q2 2015, an increase of $1.0 million over Q2 2014. The increase was primarily due to lower interest expense and the impact of a stronger USD, partially offset by increased income tax expense.
Emera Energy’s net income, adjusted to exclude mark-to-market changes, was $3.4 million in Q2 2015 compared to $5.2 million in the same quarter last year. The $1.8 million decrease was primarily due to lower contributions from trading and marketing and increased interest expense, partially offset by increased contributions from Emera’s equity investment in Bear Swamp and increased electric margin at the New England gas generating facilities.
Corporate & Other’s net loss was $0.1 million in Q2 2015 (Q2 2014, $1.2 million). The improved result was primarily due to a decrease in interest expense due to the maturity of long-term debt and increased income from equity investments, partially offset by increased business development costs and preferred stock dividends.
(1) Non-GAAP Measures
Emera uses financial measures that do not have standardized meaning under USGAAP and may not be comparable to similar measures presented by other entities. Emera calculates the non-GAAP measures by adjusting certain GAAP and non-GAAP measures for specific items the Company believes are significant, but not reflective of underlying operations in the period. Refer to the Non-GAAP Financial Measures section of our Management’s Discussion and Analysis (“MD&A”) for further discussion of these items.
Forward Looking Information
This news release contains forward looking information. Actual future results may differ materially. Additional information related to Emera, including the company’s Annual Information Form, can be found on SEDAR at www.sedar.com.
The company will be hosting a teleconference Tuesday, August 11, 2015 at 11:00am Atlantic time (10:00am Toronto/Montreal/New York; 9:00am Winnipeg; 8:00am Calgary; 7:00am Vancouver) to discuss the Q2 2015 financial results.
Analysts and other interested parties in North America wanting to participate in the call should dial 1 (888) 241-0394 FREE at least 10 minutes prior to the start of the call. International participants wanting to participate should dial (647) 427-3413. No pass code is required. The teleconference will be recorded. If you are unable to join the teleconference live, you can dial for playback, toll-free at 1-855-859-2056 FREE. The Conference ID is 76937639 (available until midnight, August 28, 2015).
The teleconference will also be web cast live at emera.com and available for playback for one year.
Emera Inc. is geographically diverse energy and services company headquartered in Halifax, Nova Scotia with approximately $10 billion in assets and 2014 revenues of $2.97 billion. The company invests in electricity generation, transmission and distribution, as well as gas transmission and utility energy services. Emera’s strategy is focused on the transformation of the electricity industry to cleaner generation and the delivery of that clean energy to market. Emera has investments throughout northeastern North America, and in four Caribbean countries. Emera continues to target having 75-85% of its adjusted earnings come from rate-regulated businesses. Emera common and preferred shares are listed on the Toronto Stock Exchange and trade respectively under the symbol EMA, EMA.PR.A, EMA.PR.C, EMA.PR.E, and EMA.PR.F. Additional Information can be accessed at www.emera.com or at www.sedar.com.