Canadian Utilities (CU) Q2 2024 earnings summary

Executive summary

• Adjusted earnings for Q2 2024 reached CAD 117 million ($0.43 per share), up 17% year-over-year, with all business segments contributing to growth and strong operational execution.

• IFRS earnings for Q2 2024 were $62 million ($0.16 per share), down $43 million year-over-year due to non-recurring items.

• Major capital investment plans for ATCO Energy Systems total $4.3B to $4.7B over three years, targeting a 3.5% to 4.3% mid-year rate base CAGR.

• Significant renewables pipeline in ATCO EnPower, with 1.3 GW of projects and $2.4–$2.6B in development capital through 2030.

• Heartland Hydrogen Project progressing, with FEED sanctioning targeted for mid-2024 and commercial operations by early 2029.

Financial highlights

• Q2 2024 adjusted earnings: $117 million vs. $100 million in Q2 2023; IFRS earnings: $62 million vs. $105 million in Q2 2023.

• ATCO Energy Systems posted adjusted earnings of CAD 112 million, up 14% from Q2 2023, driven by electric transmission rate base growth and higher allowed ROE.

• EnPower adjusted earnings rose to CAD 18 million, up CAD 10 million year-over-year, with electricity generation at CAD 8 million and energy storage at CAD 10 million.

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

• Q2 2024 capital expenditures totaled $322 million, with 95% invested in regulated utilities.

Outlook and guidance

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

• Three-year rate base growth guidance increased to $4.7 billion, representing a 4.3% CAGR; long-term rate base growth guidance of 4%-5% affirmed.

• Heartland Hydrogen Project aims for FEED completion in 2024, final investment decision in 2025, and operations by 2029.

• Renewables development pipeline targets 1.3 GW installed capacity by 2030.

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