Canadian Utilities (CU) Q4 2024 earnings summary

Executive summary

• Adjusted earnings for 2024 reached CAD 647 million ($2.38/share), up from CAD 596 million in 2023, representing a 9% year-over-year increase, while IFRS earnings declined to $480 million due to non-recurring items.

• ATCO Energy Systems delivered adjusted earnings of CAD 632 million, an 11% increase year-over-year, driven by rate base growth, higher allowable ROE, and efficiency gains.

• ATCO EnPower reported adjusted EBITDA of CAD 146 million and adjusted earnings of CAD 44 million, with strong performance in storage and industrial water.

• ATCO Australia saw adjusted earnings of CAD 48 million, down year-over-year due to lower inflation indexing, but regulatory changes increased ROE to 8.23% for 2025–2029.

• Cash flow from operations reached CAD 1.9 billion, up 8% from the prior year, supporting operations and capital programs.

Financial highlights

• Adjusted earnings increased by CAD 51 million year-over-year to CAD 647 million, with the largest contribution from ATCO Energy Systems.

• ATCO EnPower's electricity generation business saw adjusted EBITDA rise by CAD 2 million, despite lower merchant power prices.

• Storage and industrial water segment delivered adjusted EBITDA of CAD 71 million, up CAD 7 million year-over-year.

• Cash flow from operations grew 8% to CAD 1.9 billion, while capital expenditures rose to $1,917 million in 2024.

• Assets totaled $24 billion at year-end 2024.

Outlook and guidance

• Allowable ROE for 2025 reset to 8.97% from 9.28%, expected to reduce earnings by CAD 15 million year-over-year.

• Efficiency carryover mechanism ended, impacting 2025 earnings by CAD 11 million.

• Regulated Utilities' capital expenditure plan for 2025–2027 is at least $6.1 billion, supporting continued rate base growth.

• Major projects such as Yellowhead Mainline and CETO are advancing, with construction targeted for 2026.

• ATCO Gas Australia expects adjusted earnings to increase 8%-10% in 2025 following regulatory changes.