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 attributable to equity owners declined from $707 million 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’s adjusted earnings declined by CAD 12 million due to lower inflation indexing on rate base.

• Company completed the sale of ATCO Energy Ltd. to ATCO Ltd. in Q3 2024, incurring a $14 million loss excluded from adjusted earnings.

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 adjusted EBITDA grew by CAD 14 million, with storage and industrial water EBITDA up by CAD 7 million.

• Capital expenditures totaled $1,917 million in 2024, with 92% invested in regulated utilities.

• Cash flow from operations reached CAD 1.9 billion, up 8% year-over-year.

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

Outlook and guidance

• Allowable ROE for utilities reset from 9.28% in 2024 to 8.97% in 2025, expected to reduce earnings by CAD 15 million.

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

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

• Storage and industrial water segment expected to maintain similar earnings in 2025 due to fixed and long-term contracts.

• ATCO Gas Australia expects adjusted earnings to increase 8%-10% in 2025 due to a higher regulated ROE under AA6.