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10:37:26 EDT Fri 24 Oct 2014
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AltaGas Ltd
Symbol C : ALA
Shares Issued 105,616,174
Close 2013-02-27 C$ 34.50
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AltaGas earns $101.8-million in 2012

2013-02-28 08:41 ET - News Release

Mr. David Cornhill reports

ALTAGAS REPORTS STRONG FOURTH QUARTER AND FULL YEAR RESULTS FOR 2012, NEW GAS ASSETS ONLINE IN QUARTER

AltaGas Ltd. had a 51-per-cent increase in normalized net income for fourth quarter 2012 compared with fourth quarter 2011, and a 21-per-cent increase for the full year of 2012 compared with the full year of 2011. Normalized net income for 2012 was $109.5-million ($1.15 per share) compared with $90.2-million ($1.07 per share) for 2011. Normalized net income for fourth quarter 2012 was $46.6-million (44 cents per share) compared with $30.8-million (36 cents per share) for fourth quarter 2011.

"We have positioned AltaGas to deliver growth in earnings and cash flow for the next several years," said David Cornhill, chairman and chief executive officer of AltaGas. "We completed the largest corporate acquisition and commissioned two of the largest natural gas processing projects in our history. We also made considerable progress on our three Northwest run-of-river hydro projects, which are expected to be in service starting in 2014."

Normalized EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 66 per cent to $129.4-million for fourth quarter 2012 compared with $78.1-million in fourth quarter 2011. Normalized funds from operations increased by 78 per cent to $112.0-million ($1.07 per share) for fourth quarter 2012 compared with $63.0-million (73 cents per share) in 2011.

Results in the fourth quarter were primarily driven by the Aug. 30, 2012, acquisition of Semco Holding Corp. (SEMCO), natural gas utilities in Alaska and Michigan, which performed as expected. Fourth quarter results reflect the seasonality of the natural gas distribution business. In the fourth quarter, AltaGas recorded a one-time charge due to the force majeure arbitration decision related to the Sundance B power purchase arrangement.

Normalized EBITDA increased by 27 per cent to $336.9-million for 2012 compared with $265.8-million in 2011. Normalized funds from operations increased by 28 per cent to $281.0-million ($2.96 per share) for 2012 compared with $219.0-million ($2.61 per share) in 2011.

Reported net income applicable to common shares for fourth quarter 2012 was $26.7-million (25 cents per share) compared with $31.6-million (36 cents per share) for fourth quarter 2011. Reported net income applicable to common shares for 2012 was $101.8-million ($1.07 per share) compared with $82.7-million (98 cents per share) for 2011.

On Jan. 28, 2013, AltaGas and Idemitsu Kosan Co. Ltd. signed an agreement to form AltaGas Idemitsu Joint Venture LP. AltaGas Idemitsu LP plans to pursue opportunities to develop long-term natural gas supply and sales arrangements to meet the growing demand for natural gas in Asia. AltaGas Idemitsu LP will undertake feasibility studies for the development and construction of liquefaction facilities as part of the proposed project to export liquefied natural gas (LNG) to markets in Asia. AltaGas Idemitsu LP also plans to pursue opportunities to develop a liquefied petroleum gas (LPG or propane) export business including logistics, plant refrigeration and storage facilities.

"The renaissance of natural gas is providing AltaGas with many opportunities across all of our businesses. We are pleased to announce our partnership with Idemitsu to pursue opportunities to export energy from Canada to Asian markets. With the only natural gas pipeline from eastern B.C. to Canada's West Coast, AltaGas is well positioned to deliver natural gas for export from Canada ahead of any other project."

Progress on the Northwest run-of-river projects, which consist of the Forrest Kerr run-of-river project, McLymont Creek run-of-river project and Volcano Creek run-of-river project, remains ahead of schedule and on budget. In 2012, the 195-megawatt Forrest Kerr project advanced from 10-per-cent completion to approximately 75-per-cent completion. The intake structure and the powerhouse are complete in the Forrest Kerr project, as is 90 per cent of the tunnelling. The in-river construction commenced in mid-November and the sluiceway diverting the river is now in operation. The Forrest Kerr project is expected to be in service in mid-2014, contingent on the availability of the Northwest transmission line (NTL). AltaGas has received all material permits and licences for the McLymont Creek project and the Volcano Creek project and construction is well under way for service in late 2015.

Monthly common share dividend and quarterly preferred share dividend

  • AltaGas announced today that the March, 2013, dividend will be paid on April 15, 2013, to holders of record on March 25, 2013, of common shares. The ex dividend date is March 21, 2013. The amount of the dividend will be 12 cents for each common share. This dividend is an eligible dividend for Canadian income tax purposes.
  • The board approved a dividend of 31.25 cents per share for the period commencing Jan. 1, 2013, and ending March 31, 2013, on AltaGas's outstanding Series A preferred shares. The dividend will be paid on April 1, 2013, to shareholders of record on March 15, 2013. The ex dividend date is March 13, 2013.
  • The board also approved a dividend of 27.5 U.S. cents per share for the period commencing Jan. 1, 2013, and ending March 31, 2013, on AltaGas's outstanding Series C preferred shares. The dividend will be paid on April 1, 2013, to shareholders of record on March 15, 2013. The ex dividend date is March 13, 2013.

Financial highlights

Effective Jan. 1, 2012, AltaGas follows United States generally accepted accounting principles (GAAP). All prior comparative information has been restated to GAAP.

  • Net income applicable to common shares for fourth quarter 2012 was $26.7-million compared with $31.6-million for fourth quarter 2011. Net income applicable to common shares for 2012 was $101.8-million compared with $82.7-million for 2011.
  • Results for fourth quarter 2012 were normalized for $7.4-million of aftertax mark-to-market losses, $1.2-million of aftertax transaction costs and foreign exchange losses related to the acquisition of SEMCO, write-down of assets of $2.1-million, a one-time statutory tax rate adjustment of $1.1-million and the $8.2-million charge due to the Sundance force majeure arbitration decision.
  • Normalized net income was $46.6-million (44 cents per share) for fourth quarter 2012 compared with $30.8-million (36 cents per share) for fourth quarter 2011. Normalized net income for 2012 was $109.5-million ($1.15 per share) compared with $90.2-million ($1.07 per share) for 2011.
  • Normalized EBITDA (earnings before interest, taxes, depreciation and amortization) was $129.4-million for fourth quarter 2012 compared with $78.1-million for fourth quarter 2011. Normalized EBITDA for 2012 was $336.9-million compared with $265.8-million in 2011.
  • Normalized funds from operations were $112.0-million ($1.07 per share) for fourth quarter 2012 compared with $63-million (73 cents per share) for fourth quarter 2011. Normalized funds from operations were $281.0-million ($2.96 per share) for 2012 compared with $219.0-million ($2.61 per share) in 2011.
  • Reported net debt was $2,690.5-million as at Dec. 31, 2012, compared with $1,334.2-million as at Dece 31, 2011.
  • Reported debt-to-total-capitalization ratio was 57.4 per cent as at Dec. 31, 2012, compared with 49.5 per cent as at Dec. 31, 2011.

In the fourth quarter:

  • Commissioned the Gordondale deep-cut gas plant (Gordondale) and began commercial operations ahead of schedule;
  • Completed commissioning of the co-stream facility at the Harmattan complex;
  • Began in-river work at the 195-megawatt Forrest Kerr Project;
  • Received all material permits and licences for both the McLymont Creek project and Volcano Creek project.

                        CONSOLIDATED FINANCIAL RESULTS
                          (In millions of dollars)

                                  Three months ended          12 months ended
                                            Dec. 31,                 Dec. 31,
                                     2012       2011        2012         2011

Revenue                            $525.2      $333.5    $1,450.3    $1,270.6
Net revenue                         207.6       156.0       664.6       513.1
Normalized operating
income                               96.4        56.4       234.6       184.3
Normalized EBITDA                   129.4        78.1       336.9       265.8
Net income applicable to
common shares                        26.7        31.6       101.8        82.7
Normalized net income                46.6        30.8       109.5        90.2
Total assets                      5,911.9     3,556.2     5,911.9     3,556.2
Total long-term liabilities       3,349.5     1,637.6     3,349.5     1,637.6
Net additions to property,
plant and equipment                 166.5       401.1     1,532.1       642.6
Dividends declared                   37.4        29.8       132.8       112.2
Cash flows
Normalized funds
from operations                     112.0        63.0       281.0       219.0


                            CONSOLIDATED FINANCIAL
                            (In dollars per share)

                                  Three months ended         12 months ended
                                            Dec. 31,                Dec. 31,
                                    2012        2011        2012        2011

Normalized EBITDA                  $1.23       $0.90       $3.55       $3.16
Net income -- basic                 0.25        0.36        1.07        0.98
Net income -- diluted               0.25        0.36        1.06        0.97
Normalized net income               0.44        0.36        1.15        1.07
Dividends declared                  0.36        0.34        1.40        1.34
Cash flows                                                                  
Normalized funds from                                                     
operations                          1.07        0.73        2.96        2.61

Conference call and webcast details

AltaGas will hold a conference call today at 9 a.m. Mountain Time (11 a.m. Eastern Time) to discuss fourth quarter and year-end financial results, progress on construction projects and other corporate developments.

Members of the media, investment communities and other interested parties may dial 416-340-8527 or call toll-free at 1-877-240-9772. There is no pass code. Please note that the conference call will also be webcast. The webcast will be archived for one year.

Shortly after the conclusion of the call, a replay will be available by dialling 905-694-9451 or 1-800-408-3053. The pass code is 4440593. The replay expires at midnight Eastern Time on March 7, 2013.

The complete fourth quarter 2012 news release is available on the company's website in the investors/financial reporting section.

The audited consolidated annual financial statements and annual management's discussion and analysis (MD&A), which contain additional notes and disclosures, are expected to be filed with SEDAR on or about March 5, 2013, at which time a press release to that effect will be issued. The material will also be available on the AltaGas website on that same day.

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