« Back
Emera’s 2006 Earnings Increase to $125.8 Million Operating Cash Flow Doubles to $345.6 Million
HALIFAX, Nova Scotia, February 16, 2007, (EMA-TSX):Emera Inc.’s consolidated net earnings increased 4% to $125.8 million in 2006, compared to $121.2 million in 2005. Annual earnings per share were $1.14 compared to $1.11 in 2005. In 2005, a portion of income and other taxes, which would have otherwise been expensed, were deferred, pending regulatory approval of new rates. Without that deferral, 2005 comparative earnings would have been $16.7 million lower.
We are encouraged by the progress we made in 2006,” said Chris Huskilson, President and Chief Executive Officer of Emera Inc. “This year is also off to a positive start, with the settlement of NSPI’s rate case, including an agreement in principal to establish a fuel adjustment mechanism for the utility. I am excited about our investment in St. Lucia, and look forward to exploring the Caribbean opportunity further in 2007.”
Nova Scotia Power (NSPI), Emera’s largest subsidiary, contributed $104.3 million to 2006 consolidated net earnings, compared to $91.2 million in 2005, and $107.3 million in 2004. The re-establishment of NSPI’s earnings levels in 2006 is due to the combined effect of an electricity price increase early in the year; sales and production volume changes, reflecting the temporary shutdown of a large industrial customer and warmer weather; and increased proceeds from the resale of natural gas.
Consolidated net earnings for the three months ended December 31, 2006 were $33.5 million compared to $37.7 million for the fourth quarter of 2005. Quarterly earnings per share were $0.30 in 2006 compared to $0.34 in 2005.
NSPI contributed $29.9 million to consolidated net earnings in Q4 2006, compared to $34.0 million in Q4 2005. Earnings were lower quarter-over-quarter largely because 2005 amounts included a $15 million after-tax favourable adjustment to fuel expense for that year resulting from changes in NSPI’s natural gas supply pricing, all of which was recorded in the fourth quarter. This was partially offset by higher revenues in Q4 2006 due to a price increase earlier in the year. Also, NSPI’s fuel costs were lower quarter-over-quarter, primarily because warmer weather and slightly lower industrial sales enabled the utility to reduce its high marginal cost generation; and natural gas sales margin increased. NSPI’s pension, depreciation and income tax costs increased slightly in Q4 2006 compared to the prior year, and the company also recorded higher regulatory amortization expense.
Bangor Hydro Electric (BHE), Emera’s electricity transmission and distribution utility subsidiary in Maine, contributed $5.3 million to consolidated net earnings in Q4 2006, compared to $4.0 million in Q4 2005; and $16.8 million for the year ended December 31, 2006 compared to $14.9 million in 2005. Lower operating expenses reflecting the capitalization of costs associated with the Northeast Reliability Interconnect transmission project more than offset the effects of a stronger Canadian dollar.
Emera's Other operations contributed $4.7 million to consolidated net earnings compared to $15.1 million in 2005. 2005 amounts include $5.2 million of foreign exchange gains which did not recur in 2006. Finally, softer market conditions reduced natural gas marketing opportunities and also decreased electricity margins at Bear Swamp. For the three months ended December 31, 2006, Other operations incurred a loss before interest and taxes of $1.7 million in Q4 2006, compared to a loss of $0.3 million in Q4 2005.
Consolidated cash provided by operating activities improved significantly, to $345.6 million for the year ended December 31, 2006, compared to $164.3 million in 2005, reflecting the improvement in earnings and in working capital. Q4 2006 cash provided by operating activities was $106.7 million compared to cash used in operating activities of $36.3 million in Q4 2005 for the same reasons.
Forward Looking Information
This news release contains forward looking information. Actual future results may differ materially. Additional financial and operational information is filed electronically with various securities commissions in Canada through the System for Electronic Document Analysis and Retrieval (SEDAR).
Teleconference Call
Emera is holding a teleconference today at 4:00 pm Atlantic (3:00 pm Toronto/Montreal/New York; 2:00 pm Winnipeg; noon Vancouver) to discuss the Q4, 2006 financial results. Analysts and other interested parties wanting to participate in the call should dial 1-888-575-8232 (in Toronto 416-406-6419) at least 10 minutes prior to the start of the call. 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 1-800-408-3053 (in Toronto 416-695-5800), access code 3212600# (available until midnight, Friday, March 2, 2007). The teleconference will also be web cast live at www.emera.com and available for playback for one year.
About Emera
Emera Inc. (EMA-TSX) is an energy and services company with $4.0 billion in assets. Electricity is Emera’s core business. The company has two wholly-owned regulated electric utility subsidiaries, Nova Scotia Power Inc. and Bangor Hydro-Electric Company, which together serve 590,000 customers. Emera also owns 19% of St. Lucia Electricity Services Limited, which serves more than 50,000 customers on the Caribbean island of St. Lucia. In addition to its electric utility investments, Emera has a joint venture interest in Bear Swamp, a 600 megawatt pumped storage hydro-electric facility in northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and Emera Energy Services which manages energy assets on behalf of third parties and provides related services. Visit Emera on the web at www.emera.com.
For more information, please contact:
Nancy Tower, FCA
Chief Financial Officer
(902) 428-6991
Judy Steele, FCA, FCA
Director, Investor and External Relations
(902) 428-6999