Ascendant Group Limited (“Ascendant” or the “Company”) (BSX: AGL.BH), a publicly traded provider of energy and energy-related services, today announced results for the third quarter of 2019.
- Capital Plan progress continues with a roof wetting ceremony held to mark progress at the North Power Station and ongoing upgrades to transmission and distribution infrastructure.
- Year-to-date core earnings decreased $3.9 million over 2018 due to lower electricity sales and the impact of Hurricane Humberto offset by continued growth in non-utility businesses and cost savings.
- Continued cost reductions are being realized through operational efficiencies and implementation of an early retirement programme.
- Application was submitted to the Regulatory Authority as required in connection with the sale of the Company to Algonquin Power & Utilities Corp (“Algonquin”).
Executing Ascendant’s Strategic Plan
Ascendant CEO, Sean Durfy said: “The Company continues to implement the five-year plan begun in 2017 that seeks to reduce costs and grow our non-regulated businesses. In the third quarter we submitted an application to the Regulatory Authority as required in connection with the change in control of Bermuda Electric Light Company Limited (“BELCO”) from Ascendant to Algonquin. Algonquin has a long track record of renewable energy generation in the North American market and has the capital resources, operational knowledge and experience in technological innovation to bring more renewable energy to Bermuda. Our ongoing efforts to reduce costs are also bearing fruit. While we continue to experience declining sales at BELCO, costs savings are critical to keep rates in check. Our non-regulated businesses continue to perform well and experienced healthy growth of 29% compared to the first nine months of 2018.”
BELCO President, Dennis Pimentel said: “BELCO has made great progress on the $120 million North Power Station (NPS) replacement generation project and a roof wetting ceremony was held in October to celebrate the completion of the main structure and roof. We were also pleased to have received an award for the best energy storage project at the Caribbean Renewable Energy Forum (“CREF”) for our recently commissioned Nolan Smith Battery Energy Storage System (“BESS”). I would especially like to thank all the staff at BELCO who worked tirelessly to restore the damage to the electricity system caused by Hurricane Humberto in September. While electricity sales continue to decline, we are positive that our new plant and ongoing cost savings initiatives through efficiency measures will enable us to continue to provide safe, cost-effective electricity for our valued customers.”
Core earnings from operations, before corporate expenses, were $19.5 million or $2.05 per share compared to $22.9 million or $2.32 per share for the first nine months of 2018.
The decrease in core earnings from operations was largely the result of lower electricity demand at BELCO, in addition to a small increase in depreciation expense. This was partially offset by 29% growth in Ascendant’s non-utility businesses.
Nine month reported earnings were $8.0 million or $0.84 per share compared to $13.2 million or $1.34 per share for the same period in 2018. Reported earnings were impacted by the changes to core earnings from operations described above as well as $2.8 million in restructuring charges related to the sale of the Company.
Cash flow and capital spending
Cash flow provided by operations, before changes in non-cash working capital balances, decreased $5.0 million to $25.7 million for the nine month period ended 30 September 2019. The decrease was primarily driven by changes to core earnings from operations described above.
Capital expenditures for the first nine months of 2019 were $82.3 million compared to $54.8 million for the same period of 2018, reflecting execution of the Company’s capital plan including BELCO’S replacement generation, battery storage and transmission and distribution modernisation projects.
The Company’s share repurchase programme was suspended on 1 April 2019 as a result of the invitation for proposals for the purchase of the Company.
The Company’s Board of Directors has declared a quarterly dividend of 11.25 cents per common share. Year-to-date, the Company has declared dividends totalling 33.75 cents per common share.
Ascendant uses financial measures that are not defined under IFRS and may not be comparable to similar measures presented by other issuers. Ascendant calculated the non-IFRS measures by adjusting for specific items that management believes are not reflective of the normal, ongoing operations of the business. Refer to the Non-IFRS Financial Measures section of the Company’s year-end Management’s Discussion and Analysis (“2018 MD&A”) in Ascendant’s 2018 Annual Report for further discussion of these items.
Forward Looking Information
This news release contains forward-looking statements that reflect management’s current beliefs with respect to the Company’s future growth, results of operations, performance, business prospects and opportunities. These statements are based on reasonable assumptions and information currently available to Ascendant’s management and are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. Additional information about these assumptions, risks and uncertainties is included in the “Primary Factors Affecting Ascendant’s Business” section in the 2018 MD&A, which can be found on Ascendant’s website at www.ascendant.bm.
The quarterly Consolidated Financial Statements and Management’s Discussion and Analysis are available on Ascendant’s website at www.ascendant.bm.