Canadian Utilities (CU) Q2 2024 earnings summary

Executive summary

• Adjusted earnings for Q2 2024 were $117 million ($0.43/share), up $17 million year-over-year, driven by regulated rate base growth, higher ROE, and improved natural gas storage spreads.

• IFRS earnings attributable to equity owners were $62 million in Q2 2024, down $43 million year-over-year due to non-recurring items and restructuring costs.

• Strong operational execution and momentum in strategic growth plans, with all business segments contributing to earnings growth.

• Major capital investment plans include the $2 billion Yellowhead Mainline project and the Atlas Carbon Storage Hub JV with Shell.

• Cash flows from operating activities increased to $471 million in Q2 2024, supporting operations, capital program, and financial commitments.

Financial highlights

• Q2 2024 revenues were $860 million, down $19 million year-over-year, mainly due to lower commodity prices and flow-through revenues.

• Adjusted earnings Q2 2024: $117 million ($0.43/share) vs. $100 million ($0.37/share) in Q2 2023.

• ATCO Energy Systems posted adjusted earnings of $112 million, up $14 million year-over-year, driven by electric transmission rate base growth and higher allowed ROE.

• ATCO EnPower adjusted earnings rose to $18 million, up $10 million year-over-year, with $8 million from electricity generation and $10 million from storage and industrial water.

• ATCO Australia delivered $17 million in adjusted earnings, consistent with last year, benefiting from favorable PPA pricing and cost efficiencies.

Outlook and guidance

• On track to deliver 2024 capital investment guidance of $1.2 billion, with $565 million invested year-to-date.

• Three-year capital investment plan for ATCO Energy Systems updated to $4.3–$4.7 billion, targeting a 3.5%–4.3% mid-year rate base CAGR.

• Construction of the Yellowhead Mainline project expected to start in 2026, with operations in Q4 2027.

• Atlas Carbon Storage Hub phase one expected operational in late 2028.

• No additional equity financing anticipated in the near term; future equity needs will be evaluated as growth accelerates.