EPCOR announces 2023 third quarter results and 2024 dividend increase

Edmonton, Alberta - EPCOR Utilities Inc. (EPCOR) today filed its quarterly results for the period ended September 30, 2023.

“EPCOR’s operational and financial performance was ahead of expectations for the first nine months of the year,” said John Elford, EPCOR President & CEO. “Strong financial performance was driven in part by construction activity from commercial developments in central Texas, and continuing growth in our customer base. Execution of our strategy continues to focus on investing in reliable utility services while protecting ratepayers; delivering a strong, stable dividend; and re-investing in the business to deliver sustained income and dividend growth.”

“EPCOR’s utilities continue to deliver significant organic growth in our customer base across Canada and the United States, accompanied by the successful execution of contracted utility infrastructure projects. Based on the forecast performance of our businesses, the EPCOR dividend is being increased by 4.3% from $185 million to $193 million in 2024. This is the third consecutive annual increase in the dividend, which has grown by more than $50 million since 2016.”

Highlights of EPCOR’s financial performance are as follows:

• Net income was $118 million and $266 million for the three and nine months ended September 30, 2023, compared with net income of $119 million and $286 million for the comparative periods in 2022, respectively. The decrease of $1 million and $20 million for the three and nine months ended September 30, 2023, respectively, was primarily due to fair value adjustments related to financial electricity purchase contracts, as well as higher depreciation and finance expenses in 2023, partially offset by higher Adjusted EBITDA, as described below.
• Adjusted EBITDA¹​ was $305 million and $805 million for the three and nine months ended September 30, 2023, compared with $265 million and $707 million for the comparative periods in 2022, respectively. The increase of $40 million and $98 million for the three and nine months ended September 30, 2023, respectively, was primarily due to higher construction activity, customer growth and higher rates, partially offset by higher operating costs.
• Investment in capital projects was $687 million for the nine months ended September 30, 2023, compared with $631 million for the corresponding period in 2022, primarily due to higher spending in EPCOR’s Distribution and Transmission segment and U.S. Operations segment, partially offset by lower capital spending in EPCOR’s Water Services segment.

Interim management’s discussion and analysis and the unaudited condensed consolidated interim financial statements are available on our website and SEDAR+.

EPCOR, through its wholly owned subsidiaries, builds, owns and operates electrical, natural gas and water transmission and distribution networks, water and wastewater treatment facilities, sanitary and stormwater systems in Canada and the United States. EPCOR also provides electricity, natural gas and water products and services to residential and commercial customers. EPCOR, headquartered in Edmonton, is committed to conducting its business and operations safely and responsibly. Environmental stewardship, public health and community well-being are at the heart of EPCOR’s mission to provide clean water and safe, reliable energy. EPCOR is an Alberta Top 75 employer and is ranked among Corporate Knights’ 2023 Best 50 Corporate Citizens in Canada.

^{1. Adjusted EBITDA is a non-GAAP financial measure.  See the Non-GAAP Financial Measures section in Appendix 1.}

For more information, please contact:

Media Relations
Phone: 780-721-9001​
Email: media@epcor.com

Matt Lemay
Investor/Corporate Relations
Phone: 780-412-3711
Toll Free: 1-877-969-8280
Email: mlemay@epcor.com

Appendix 1 Non-GAAP Financial Measures

EPCOR uses earnings before finance expenses, income tax recovery (expense), depreciation and amortization, changes in the fair value of derivative financial instruments, transmission system access service charge net collections and other unusual items (collectively, Adjusted EBITDA) to discuss operating results for EPCOR’s lines of business. Adjusted EBITDA is a non-GAAP financial measure and is not a standardized financial measure under IFRS and might not be comparable to similar financial measures disclosed by other issuers.

The reconciliation between Adjusted EBITDA to Net income as reported under IFRS is shown below:

^{1. The change in fair value of derivative financial instruments represents the change in fair value of financial electricity purchase contracts between the electricity market forward prices and the contracted prices at the end of the reporting period, for the contracted volumes of electricity.}

^{2. Transmission system access service charge net collections is the difference between the transmission system access service charges paid to the provincial system operators and the transmission system access service charges collected from electricity retailers. Transmission system access service charge net collections are timing differences, which are collected from or returned to electricity retailers as the transmission system access service charges and customer billing determinants are finalized.​}