Fiscal 2012: Valener’s recurring income increases 14% and Gaz Metro expands its commercial offering
-- Recurring net income of $30.2 million, up $3.7 million; -- $144.7 million invested in Gaz MÃ©tro's capital and in the development of the Seigneurie de BeauprÃ© wind power projects; -- Issuance of $100 million in preferred shares; and -- $1.00 in dividends paid per common share.
-- Recurring net income of $151.6 million, up $4.1 million; -- Acquisition of Central Vermont Public Service and merger with Green Mountain Power in Vermont; -- Deployment of liquefied natural gas refuelling stations in Quebec and Ontario to serve the heavy transport market; and -- Signing of agreements to inject biomethane into the Quebec gas network.
MONTREAL, Nov. 29, 2012 /CNW Telbec/ – Valener Inc. (Valener) (TSX:
VNR), the public investment vehicle in Gaz MÃ©tro Limited Partnership
(Gaz MÃ©tro), is announcing today its financial results for the fiscal
year ended September 30, 2012.
Excluding non-recurring items, Valener recorded net income attributable
to common shareholders of $30.2 million ($0.81 per common share) for
fiscal 2012 versus $26.5 million ($0.71 per common share) last year, a
$3.7 million ($0.10 per share) increase that came mainly from the
earnings generated by Central Vermont Public Service Corporation (CVPS)
since its June 2012 acquisition by Gaz MÃ©tro.
Gaz MÃ©tro and wind power: Two strategic investments
“In accordance with its strategy, Valener has continued to support the
growth of Gaz MÃ©tro, in which it holds a 29% interest, and the
development of the Seigneurie de BeauprÃ© wind power projects, in which
it holds a 24.5% interest,” said Pierre Monahan, Chairman of Valener’s Board of Directors.
“During fiscal 2012, Valener participated in two subscriptions to
Gaz MÃ©tro’s capital for a total of $97 million as part of the financing
of the CVPS acquisition and the development of the Kingdom Community
Wind project in Vermont. Valener also invested more than $47 million to
finance its share in the Seigneurie de BeauprÃ© wind power projects,” continued Mr. Monahan.
A significant diversification of Gaz MÃ©tro’s energy offering
“In just a little over five years, Gaz MÃ©tro has gradually positioned
itself in the electricity distribution segment in Vermont, having
acquired Green Mountain Power in 2007 and Central Vermont Public
Service in 2012. The merger of these two entities, on October 1, 2012,
created a major new distributor, the new Green Mountain Power, which
serves more than 70% of the Vermont electricity distribution market.
Gaz MÃ©tro now operates in two major geographic areas, Quebec and
Vermont, that share the same sustainable development values, and
Vermont now accounts for approximately 41% of Gaz MÃ©tro’s $5 billion in
assets,” said Sophie Brochu, President and Chief Executive Officer of Gaz MÃ©tro.
“Gaz MÃ©tro is following through on its commitment to reunite energy and
environment, by leveraging its expertise as well as the strengths and
advantages of natural gas in expanding its energy offering. To this
end, Gaz MÃ©tro is involved in the development of the 341 MW and 63 MW
wind power projects in Quebec and Vermont, respectively, in the
deployment of natural gas as a fuel in the heavy transport industry,
and in developing the use of biomethane–all promising markets with
direct and immediate economic and environmental impacts,” said Ms. Brochu.
Acquisition of CVPS by Gaz MÃ©tro and merger with Green Mountain Power
On June 27, 2012, Gaz MÃ©tro, through its wholly owned subsidiary
Northern New England Energy Corporation (NNEEC), acquired all the
issued and outstanding shares of CVPS for a total net cash
consideration of $513.5 million (US$500.7 million), $20.0 million of
which was disbursed in fiscal 2011. Transaction-related costs recorded
in the income statement stood at $7.8 million (net of income taxes) for
fiscal 2012 and at $1.8 million in fiscal 2011. The preliminary
purchase price allocation resulted in the recognition of $233.1 million
Gaz MÃ©tro financed the acquisition with 50/50 debt/equity. For the debt
portion, Gaz MÃ©tro inc. (GMi) entered into a note purchase agreement
with investors, by way of private placement, for a total capital amount
of US$260.0 million. The notes (guaranteed by Gaz MÃ©tro) were issued on
May 15, 2012 in two series of US$130.0 million each and the proceeds
were loaned to Gaz MÃ©tro under similar conditions. These notes bear
3.86% and 5.06% annual interest and will mature 10 and 30 years
following their issuance, respectively. For the equity portion, on June
28, 2012, Gaz MÃ©tro issued, by way of private placement, new units to
its Partners, Valener and GMi, for total proceeds of $260.0 million.
On October 1, 2012, CVPS and GMP, wholly owned subsidiaries of NNEEC,
merged to create a single Vermont-based utility. The new company, which
kept the name GMP (GMP Combined), now serves more than 255,000
customers throughout the entire State of Vermont. According to the
planned synergy-sharing mechanism, the merger will create considerable
cost savings that will benefit both Vermont customers (US$144.0 million
over 10 years) and GMP Combined. These savings will be achieved through
a more efficient allocation of resources, equipment and facilities over
a more contiguous service area, regulatory savings, and improved
purchasing power with suppliers of products and services.
Seigneurie de BeauprÃ© wind power projects: Second year of construction
progressing as scheduled
Valener and Gaz MÃ©tro indirectly own interests of 24.5% and 25.5%,
respectively, in the Seigneurie de BeauprÃ© wind power projects
developed jointly with Boralex Inc., which owns the other 50% (the
Wind power projects 2 and 3
Construction of wind power projects 2 and 3, for a total installed
capacity of 272 megawatts, has progressed according to schedule, and
the site is slated to shut down for the winter on December 14, 2012.
To date, 50 wind turbine towers have been erected, including 9 fully
installed turbines, and over 101 km of the 114-km electrical collector
system has been buried. All 115 km of the access roads and all of the
foundations have been completed, as has most of the construction work
on the substation and operations building.
Next year, the over 100 square-kilometre site will employ some 400
workers a day to erect the remaining 76 towers, install the blades and
casings of the remaining 117 wind turbines, and bury the remainder of
the collector system such that project start-up can proceed as planned
for December 1, 2013.
These projects represent a total investment of approximately
$750 million (including financing costs). As at September 30, 2012, the
equity required under the financing terms had been fully subscribed by
the consortium, and the amounts invested by Gaz MÃ©tro and Valener
totalled $76.7 million.
Wind power project 4
Wind power project 4, which will also be developed on the private lands
of Seigneurie de BeauprÃ© represents a total investment of approximately
$190 million (including financing costs) and will have a total
installed capacity of 69 MW.
During fiscal 2012, steps were undertaken to obtain the requisite
environmental approvals. In June 2012, public environment-related
hearings were held by the relevant Quebec government agency, BAPE (Bureau d’audiences publiques sur l’environnement), and the final report was made public on November 16, 2012. The
consortium has favourably received the BAPE’s conclusion, which
stipulates that wind power project 4 could be completed under certain
conditions. Besides, the decree from the Quebec Ministry of Sustainable
Development, Environment, Wildlife and Parks (MinistÃ¨re du DÃ©veloppement durable, de l’Environnement, de la Faune et
des Parcs) is expected to be received in January 2013, which will constitute the
final authorization required to begin the work. Operational start-up
for wind power project 4 is scheduled for December 2014.
The consortium plans on completing most of the work on the road,
foundation and collector system in fiscal 2013.
Subscription of Gaz MÃ©tro units and issuance of preferred shares
In fiscal 2012, Valener subscribed twice to Gaz MÃ©tro’s capital, in
proportion to its current interest in Gaz MÃ©tro, first on June 28, 2012
for $75.4 million, and then on September 28, 2012 for $21.8 million.
These equity investments were made to finance a portion of the CVPS
acquisition and the development of GMP’s Kingdom Community Wind project
in Vermont. Valener financed these investments using part of the net
proceeds of the June 6 issuance of $100 million in Series A cumulative
rate reset preferred shares.
Declaration of quarterly dividends on common and preferred shares
Valener’s board of directors declared a quarterly dividend of $0.25 per
common share payable on January 15, 2013 to shareholders of record at
the close of business on December 31, 2012. Valener expects to maintain
the dividend at $0.25 per common share for each quarter of fiscal 2013.
Under Valener’s dividend reinvestment plan, the board of directors
approved the reinvestment of dividends into additional common shares,
for the dividend payable on January 15, 2013, by way of an issuance of
new common shares of Valener, at a 5% discount compared to the weighted
average price for the five trading days immediately preceding the
dividend payment date.
The board of directors also declared a quarterly dividend of $0.271875
per Series A preferred share for the period of October 16, 2012 to
January 15, 2013, payable on January 15, 2013 to the shareholders of
record at the close of business on January 9, 2013.
Valener’s consolidated net income attributable to common shareholders,
excluding the share in the non-recurring items of Gaz MÃ©tro, net of
For the fiscal years ended September 30 (in millions of dollars, unless otherwise indicated) 2012 2011 Consolidated net income 29.6 30.3 Share in the non-recurring items of Gaz MÃ©tro 2.3 (4.8) Income taxes on the share in the non-recurring items of Gaz MÃ©tro (0.1) 1.0 Consolidated net income, excluding the share in the non-recurring items of Gaz MÃ©tro, net of income taxes 31.8 26.5 Less: Cumulative dividends on Series A preferred shares 1.6 - Consolidated net income attributable to common shareholders, excluding the share in the non-recurring items of Gaz MÃ©tro, net of income taxes (1) 30.2 26.5 Weighted average number of common shares outstanding (in millions of common shares) 37.5 37.1 Consolidated net income attributable to common shareholders, excluding the share in the non-recurring items of Gaz MÃ©tro, net of income taxes, per common share (in $) (1) 0.81 0.71
(1) These measures are financial measures that are not defined in
Canadian generally accepted accounting principles (GAAP).
Gaz MÃ©tro’s results
Excluding non-recurring items, the net income attributable to the
Partners of Gaz MÃ©tro totalled $151.6 million in fiscal 2012 compared
to $147.5 million last year. The $4.1 million increase came partly from
the income generated by CVPS since it was acquired in June 2012 and
partly from the favourable parameters in GMP’s 2012 rate case,
mitigated by higher financial expenses on the additional financings for
the CVPS acquisition and for GMP’s Kingdom Community Wind (KCW) project
and by the impact on net income from the sale of Aqua Data Inc.
(Aqua Data) and of MTO Telecom Inc. (MTO) during fiscal 2011.
Results for natural gas distribution in Quebec (Gaz MÃ©tro-QDA)
For fiscal 2012, Gaz MÃ©tro-QDA’s normalized natural gas deliveries
totalled 5,419 million cubic metres, down 0.8% or 42 million cubic
metres from 5,461 million cubic metres last year, as the decrease in
normalized natural gas deliveries in fiscal 2012 was much less than had
been anticipated in the 2012 rate case.
In the industrial market, natural gas deliveries were down 0.2% year
over year, as there was less consumption in the pulp and paper sector.
This decrease was partly offset by greater consumption in the
Normalized deliveries to the residential and commercial markets declined
0.5% and 2.0%, respectively, from fiscal 2011. These decreases were
essentially due to slow economic growth combined with energy
conservation measures undertaken by Gaz MÃ©tro-QDA’s customers, partly
offset by the maturation of new sales.
As for the number of customers, in fiscal 2012 Gaz MÃ©tro-QDA saw its
customer base increase to 189,846, up 3.0% from 184,373 the previous
fiscal year. This increase stems mainly from customers that were added
upon execution of new contracts that had been signed in previous years.
Gaz MÃ©tro-QDA’s net income attributable to the Partners of Gaz MÃ©tro
totalled $110.7 million for fiscal 2012, up slightly by $0.1 million
from last year, partly due to overearnings realized on increased
optimization transactions on transportation and load-balancing
contracts, partly offset by the rate reduction authorized by the RÃ©gie
de l’Ã©nergie (RÃ©gie) for fiscal 2012, which translated into a decrease
in net income.
Results of energy distribution in Vermont
Excluding non-recurring items, net income attributable to the Partners
of Gaz MÃ©tro from energy distribution activities in Vermont totalled
$20.2 million(1) for fiscal 2012, up $5.1 million from $15.1 million in fiscal 2011.
This increase was mainly due to:
-- a $10.2 million increase in GMP's gross margin attributable to its 2012 rate case and its rate adjustment mechanism, which showed an amount to be recovered from customers; -- $5.2 million in net income generated by CVPS since its acquisition on June 27, 2012; and -- a $4.2 million increase in shares in the earnings of companies subject to significant influence, mainly due to greater ownership in these companies following the acquisition of CVPS;
partly mitigated by:
-- a $9.8 million increase in financial expenses, mainly from the financings for the CVPS acquisition and for GMP's KCW project; -- a $3.1 million increase in the operating and maintenance expenses of Vermont Gas Systems Inc. (VGS) and of GMP, mainly due to an increase in salaries and employee future benefits-related expenses, higher costs incurred for system maintenance and costs incurred by GMP to integrate CVPS; and -- a $1.2 million decrease in VGS's gross margin, attributable primarily to lower deliveries as a result of warmer temperatures.
Results of other activities
Natural Gas Transportation
Net income attributable to the Partners of Gaz MÃ©tro from the Natural
Gas Transportation segment totalled $16.3 million(1) for fiscal 2012, up $0.8 million from fiscal 2011. The increase was
mainly due to an increased share in the income of Portland Natural Gas
Transmission System (PNGTS), which, among other things, saw a rise in
short-term sales because less natural gas was available on other
systems, partly mitigated by the fact that Trans QuÃ©bec & Maritimes
Pipeline Inc. (TQM) had benefited from a favourable adjustment to its
amortization expense in the first quarter of fiscal 2011, after the
amortization rates for property, plant and equipment were revised
downward upon National Energy Board approval.
Natural Gas Storage
For fiscal 2012, the net income attributable to the Partners of
Gaz MÃ©tro from the Natural Gas Storage segment totalled $6.5 million(1), a $1.0 million year-over-year increase that was mainly due to lower
operating expenses caused by delays in carrying out certain maintenance
Energy Services and Other
Excluding non-recurring items, the net income attributable to the
Partners of Gaz MÃ©tro from the Energy Services and Other segment was
$3.5 million(1) in fiscal 2012, down $1.0 million from fiscal 2011. This decrease was
mainly due to the sale, in fiscal 2011, of the interests in Aqua Data
and MTO and to a higher net loss incurred by Gaz MÃ©tro Transport
Solutions, L.P. (Transport Solutions), which commenced operations
during fiscal 2011. These factors were partly offset by greater
profitability at HydroSolution L.P. owing to higher rental rates for
water heaters and to greater electric water heater sales as well as to
additional revenues generated on the sale of heating and air
conditioning equipment that began in March 2011.
Natural gas initiatives in Quebec
Network development at Thetford Mines
In December 2010, Gaz MÃ©tro-QDA confirmed that it would be involved in
bringing natural gas to the Thetford Mines region by extending its
current network by 80 km. Thanks to an $18.1 million financial
contribution from the federal government and a $7.2 million investment
by Gaz MÃ©tro-QDA, this $25.3 million project, highly anticipated by the
community of Thetford Mines, took shape in November 2012.
This gas pipeline project will contribute to the region’s economic
development and greatly improve the environmental performance of these
future customers of Gaz MÃ©tro-QDA. To date, more than 125 contracts
have been signed, for an annual consumption of over 11 million cubic
metres. The project was commissioned in November 2012, and
approximately 90 customers are expected to be connected by the end of
the 2012 calendar year. These conversions to natural gas will help
reduce fuel oil consumption by approximately eight million litres,
which represents a GHG emissions reduction of about 7,000 tonnes of CO(2) equivalent.
Projects to inject biomethane into Gaz MÃ©tro-QDA’s network
The Quebec government has created a program to treat organic waste
through biomethanation, or composting, and thereby divert organic
materials from landfills to produce a new green energy, biomethane,
which will aim to replace fossil and other fuels.
On July 26, 2012, Gaz MÃ©tro announced the first project to inject
biomethane into its network. It is a major project that will be an
important milestone in the development of a new renewable energy in
Quebec. It involves the construction of an anaerobic digestion plant in
Saint-Hyacinthe as well as the infrastructures needed to feed
biomethane into Gaz MÃ©tro-QDA’s distribution network.
On September 28, 2012, Gaz MÃ©tro-QDA submitted, to the RÃ©gie, a
biomethane injection investment project, which would eventually reduce
greenhouse gases by 25,000 tonnes annually. In accordance with the
agreement with the City of Saint-Hyacinthe, Gaz MÃ©tro-QDA will purchase
the energy produced by that city and install the infrastructures needed
to inject biomethane into its distribution network and make it
available its customers. As a public utility, Gaz MÃ©tro will therefore
be serving the needs of municipalities and the Quebec government’s goal
of developing biomethane, a locally produced, renewable energy.
An agreement similar to the one with the City of Saint-Hyacinthe has
also been signed with Quebec City. These projects are subject to the
Project to serve the CÃ´te-Nord region
The CÃ´te-Nord region is the last of Quebec’s major industrial regions
that does not yet benefit from the environmental and economic
advantages of natural gas.
Large amounts of heavy oil are currently consumed in the CÃ´te-Nord
region. However, the distance separating the CÃ´te-Nord from
Gaz MÃ©tro-QDA’s existing infrastructures is considerable. More than 450
km of pipeline would have to be laid to connect Saguenay to Sept-Ãžles,
passing through other major industrial centres of Baie-Comeau and
Such a project would require an investment of about $750 million and add
approximately 40% to the value of Gaz MÃ©tro-QDA’s rate base. To make a
fully informed decision on a project of such magnitude, the Quebec
government and Gaz MÃ©tro are diligently carrying out feasibility
studies. The conclusions of these studies are expected by the end of
the 2012 calendar year. If the conclusions are positive, Gaz MÃ©tro-QDA
will continue the regulatory and environmental approval processes in
calendar year 2013. If all the necessary approvals are obtained, the
preparatory work and construction of Gaz MÃ©tro-QDA’s CÃ´te-Nord service
could begin in 2015 with a view to start-up in 2016.
Natural gas as transportation fuel
Transport Solutions, an indirect subsidiary of Gaz MÃ©tro created to
develop natural gas for use as fuel by the transportation industry, is
deploying a “Blue Road” along the Quebec City – Toronto corridor, which
is heavily used by transport trucks. Since July 2011, it has been
installing the facilities needed to supply liquefied natural gas (LNG)
to 180 freight trucks from three refuelling stations, under an
agreement entered into with Transport Robert 1973 LtÃ©e (Robert
Transport). The private stations in Boucherville and Mississauga have
been operating since September 2011 and January 2012, respectively. The
third station, slated for start-up in fiscal 2013, would be the first
public LNG distribution station in the Quebec City metropolitan area.
In October 2012, pending completion of the third station, Transport
Solutions installed a temporary mobile fuelling station on the Robert
Transport property in Saint-Nicolas, which can also service other
carriers. For Transport Solutions, the project represents an investment
of approximately $5 million. Delivery of 180 trucks ordered by Robert
Transport began in autumn 2011 and will continue during fiscal 2013.
Another carrier, Transport YN.-Gonthier inc., has also started using
natural gas to fuel its trucks.
On July 31, 2012, Gaz MÃ©tro announced a first public liquefied
biomethane fuelling station in RiviÃ¨re-du-Loup, marking a new stage on
the “Blue Road.” Attentive to the needs of municipalities and the
government’s goal to promote green energy, Transport Solutions has
signed an agreement with a renewable energy organization, SEMER (SociÃ©tÃ© d’Ã©conomie mixte d’Ã©nergie renouvelable de la rÃ©gion de
RiviÃ¨re-du-Loup). Under this agreement, Transport Solutions will buy all the liquefied
biomethane produced by the RiviÃ¨reduLoup plant for a minimum of 20
years and will operate a new liquefied biomethane fuelling station for
the heavy transport market.
Natural gas and electricity initiatives in Vermont
VGS system development project
On October 17, 2012, VGS announced an agreement with International Paper
Company under which one of that company’s mills will purchase, under a
long-term contract, natural gas from VGS starting at the end of the
2015 calendar year. In the 2013 calendar year, VGS plans on seeking the
regulatory approvals needed for construction of the required
facilities. The required system extension would be an expansion of the
planned VGS system extension into Addison County in order to serve the
communities of Vergennes and Middlebury. VGS plans to file for
regulatory approval for this extension into Addison County by the end
of the 2012 calendar year. If approved, these system extensions could
increase VGS’s rate base by approximately US$100 million.
Kingdom Community Wind (KCW) project
At the end of fiscal 2011, GMP began construction of the KCW project, a
63 MW wind power project located in Lowell, Vermont. This
US$150-million, 21-turbine project will supply power to more than
24,000 households consisting of GMP customers and members of the
Vermont Electric Cooperative, Inc. Construction of the the wind farm
was completed and the 21 turbines have been in service since November
20, 2012. As at September 30, 2012, GMP had invested US$140.2 million
in this project.
This investment, which is regulated and part of GMP’s rate base, was
financed through both debt and equity in accordance with GMP’s capital
structure. During fiscal 2012, GMP issued, by way of private placement,
US$75.0 million in first mortgage bonds. The remainder of the
investment was financed by an equity injection from Gaz MÃ©tro, through
Implementation of a smart electricity distribution system
Under a program implemented in 2009 by the U.S. federal government, most
Vermont electricity distributors received a preliminary grant to
implement a state-wide smart electricity distribution network. GMP
Combined received a grant equivalent to its US$50.2 million investment,
for a total investment of US$100.4 million. This three-year project
consists of, among other activities, replacing the current customer
information system, purchasing and installing approximately 275,000
smart meters for customers, incorporating certain detection and
automation capacities into the distribution system, and participating
in dynamic rate pilot projects with other electricity distributors in
Vermont. GMP Combined and the other Vermont electricity distributors
began implementation of this major project in fiscal 2010 and, to date,
the work has been progressing as scheduled.
As at September 30, 2012, GMP Combined had invested $73.0 million in
this project, $35.0 million of which is to be reimbursed under the
terms of the grant. As at that date, $29.0 million of the grant had
already been received. GMP Combined’s management considers that the
success of this project could both transform GMP Combined’s customer
relationships and the way it manages operations, by incorporating
advanced technology into its operations.
Gaz MÃ©tro's segment results - Consolidated net income attributable to the Partners of Gaz MÃ©tro (in millions of dollars) 2012 2011 Change Energy Distribution Gaz MÃ©tro-QDA 110.7 110.6 0.1 VGS, GMP and CVPS 23.1 18.9 4.2 Financing costs of investments in this segment (1) (9.7) (3.8) (5.9) Costs related to the CVPS acquisition (net of income taxes) 6.8 - 6.8 130.9 125.7 5.2 Natural Gas Transportation TQM, PNGTS and Champion Pipe Line Corporation Limited 19.1 19.1 - Financing costs of investments in this segment (1) (2.8) (3.6) 0.8 16.3 15.5 0.8 Natural Gas Storage Intragaz 8.1 7.2 0.9 Financing costs of investments in this segment (1) (1.6) (1.7) 0.1 6.5 5.5 1.0 Energy Services and Other Energy, water and fibre optic 4.4 23.3 (18.9) Financing costs of investments in this segment (1) (0.9) (1.5) 0.6 Gain on the sale of MTO - (17.5) 17.5 Loss on the sale of Aqua Data - 0.2 (0.2) 3.5 4.5 (1.0) Corporate Affairs and Other Corporate Affairs and Other (6.6) (4.5) (2.1) Costs related to the CVPS acquisition 1.0 1.8 (0.8) Corporate reorganization expenses - 0.1 (0.1) Gain realized by Gaz MÃ©tro Ã‰ole inc. on the sale of 49.0% of its interest in the Seigneurie projects - (1.1) 1.1 (5.6) (3.7) (1.9) Consolidated net income attributable to the Partners of Gaz MÃ©tro, excluding non-recurring items (2) 151.6 147.5 4.1 Non-recurring items (2) (7.8) 16.5 (24.3) Consolidated net income attributable to the Partners of Gaz MÃ©tro 143.8 164.0 (20.2)
(1) These costs consist of the interest on the long-term debt incurred by Gaz MÃ©tro to finance investments in the subsidiaries, joint ventures and companies subject to significant influence of each segment. (2) This measure is a non-GAAP financial measure.
Quarterly results of Valener and Gaz MÃ©tro
Valener’s main investment is in Gaz MÃ©tro. Consequently, its results are
significantly influenced by those of Gaz MÃ©tro. Given the seasonal
nature of its operations and the normally low demand for energy during
the summer months, Gaz MÃ©tro has historically incurred a loss during
the fourth quarter of its fiscal year. Excluding non-recurring items,
net loss attributable to the Partners of Gaz MÃ©tro for the fourth
quarter of fiscal 2012 was $15.6 million compared to a net loss of
$32.1 million for the same period of 2011. Excluding non-recurring
items, Valener recorded a net loss attributable to common shareholders
of $3.1 million ($0.08 per common share) for the fourth quarter of 2012
compared to a net loss of $7.1 million ($0.19 per common share) for the
Valener will hold a conference call with financial analysts today,
Thursday, November 29, 2012 at 11 am (Eastern Time) to discuss its
results and those of Gaz MÃ©tro for the fiscal year ended
September 30, 2012.
Pursuant to an administration and management support agreement entered
into between Valener and Gaz MÃ©tro on September 30, 2010, Gaz MÃ©tro
acts as manager of Valener. As such, Sophie Brochu, President and Chief
Executive Officer, and Pierre Despars, Executive Vice-President,
Corporate Affairs and Chief Financial Officer of Gaz MÃ©tro inc., the
General Partner of Gaz MÃ©tro, will be the speakers, and a question
period will follow.
The call will be broadcast live and is accessible by dialling 647-427-7450 or toll-free 1-888-231-8191. It will also be available via webcast on Valener’s website (www.valener.com) in the Events & Presentations page of the Investors section.
The media and other interested parties are invited to listen in. After
the conference call, the speakers will be available for media
interviews and questions.
For 30 days afterward, a rebroadcast will be accessible by dialling
416-849-0833 or toll-free 18558592056 (access code: 46598817). For
90 days afterward, the call can be played back on the above-mentioned
Overview of Valener
Valener owns an economic interest of approximately 29% in Gaz MÃ©tro.
Valener therefore has a stake in the energy industry and benefits from
Gaz MÃ©tro’s diversified profile, both in terms of geography and
business segment. Valener also owns a 24.5% indirect interest in the
wind power projects developed with Gaz MÃ©tro and Boralex Inc. on the
private lands of SÃ©minaire de QuÃ©bec. Valener’s common shares and
preferred shares are listed on the Toronto Stock Exchange under the
“VNR” trading symbol for common shares and under the “VNR.PR.A” trading
symbol for Series A preferred shares. www.valener.com
Overview of Gaz MÃ©tro
With over $5 billion in assets, Gaz MÃ©tro is a leading energy provider.
It is the largest natural gas distribution company in Quebec, where its
10,000-km underground network of pipelines serves 300 municipalities
and more than 185,000 customers. Gaz MÃ©tro is also present in Vermont,
producing electricity and distributing electricity and natural gas to
cater to the needs to some 300,000 customers. Gaz MÃ©tro is actively
involved in the development of innovative, sustainability-oriented
energy projects such as the production of wind power, the use of
natural gas as a transportation fuel and the development of biomethane
as a renewable energy source. Gaz MÃ©tro is committed to ensuring the
satisfaction of its customers, providing support to businesses, local
organizations, families and communities, and meeting the needs of its
partners (Gaz MÃ©tro inc. and Valener) and employees. www.gazmetro.com
Cautionary note regarding forward-looking statements
This press release may contain forward-looking information within the
meaning of applicable securities laws. Such forward-looking information
reflects the intentions, plans, expectations and opinions of the
management of GMi, in its capacity as General Partner of Gaz MÃ©tro, and
acting as manager of Valener (the management of the manager) and is
based on information currently available to the management of the
manager and assumptions about future events. Forward-looking statements
can often be identified by words such as “plans,” “expects,”
“estimates,” “forecasts,” “intends,” “anticipates” or “believes” or
similar expressions, including the negative and conjugated forms of
these words. Forward-looking statements involve known and unknown risks
and uncertainties and other factors beyond the control of the
management of the manager. A number of factors could cause the actual
results of Valener or of Gaz MÃ©tro to differ significantly from current
expectations, as described in the forward-looking statements, including
but not limited to the general nature of the aforementioned, terms of
decisions rendered by regulatory agencies, the competitiveness of
natural gas in relation to other energy sources, the reliability of
natural gas and electricity supply, the integrity of the natural gas
and electricity distribution systems, the progress of wind power
projects and other development projects, the ability to complete
attractive acquisitions and the related financing and integration
aspects, the ability to secure future financing, general economic
conditions, exchange rate and interest rate fluctuations, weather
conditions and other factors described in the Risk Factors Relating to
Valener and the Risk Factors Relating to Gaz MÃ©tro sections of
Valener’s and Gaz Metro’s MD&As for the year ended September 30, 2012
and in Valener’s disclosure filings. Although the forward-looking
statements contained herein are based on what the management of the
manager believes to be reasonable assumptions, including assumptions to
the effect that no unforeseen changes in the legislative and regulatory
framework of energy markets in Quebec and in the New England states
will occur; that no significant event occurring outside the ordinary
course of business, such as a natural disaster or other calamity, will
occur; that Gaz MÃ©tro will be able to continue distributing
substantially all of its net income (excluding non-recurring items);
that the wind power projects in which Valener and Gaz MÃ©tro hold
indirect interests will be completed on schedule and as per
specification; that GMP will be able to quickly and effectively
integrate CVPS’s operations; and that the conclusions of studies on the
project to serve the CÃ´te-Nord region will be positive and that the
regulatory approvals will be obtained in addition to the other
assumptions described in the Valener and Gaz MÃ©tro MD&As for the fiscal
year ended September 30, 2012, the management of the manager cannot
assure investors that actual results will be consistent with these
forward-looking statements. These forward-looking statements are made
as of this date, and the management of the manager assumes no
obligation to update or revise them to reflect new events or
circumstances, except as required pursuant to applicable securities
laws. Readers are cautioned to not place undue reliance on these
(1) Net of financing costs.
HIGHLIGHTS VALENER INC. Fiscal years ended September 30 (in millions of dollars, except for share data, which is in dollars, and unless otherwise indicated) 2012 2011 (audited) (audited) CONSOLIDATED INCOME AND CASH FLOWS Share in the net income of Gaz MÃ©tro $ 41.7 $ 47.6 Net income attributable to the common shareholders $ 28.0 $ 30.3 Basic and diluted net income per common share $ 0.75 $ 0.82 Cash flows related to operating activities $ 23.8 $ 34.5 Dividends declared per share to shareholders of record on December 30, March 30, June 29, and September 28 $ 1.00 $ 1.00 Weighted average number of common shares outstanding (in millions) 37.5 37.1 OTHER INFORMATION Market prices for common shares on the Toronto Stock Exchange (TSX): High $ 16.50 $ 18.37 Low $ 13.55 $ 13.96 Close $ 16.02 $ 14.42 Market prices of the Series A preferred shares on the TSX: High (1) $ 26.40 $ - Low (1) $ 25.10 $ - Close (1) $ 26.20 $ - Credit ratings Series A preferred shares (Standard & Poor's (S&P) / DBRS Limited (DBRS)) P-2(low)/Pfd-2(low) - CONSOLIDATED BALANCE SHEETS September 30, September 30, 2012 2011 (audited) (audited) Total assets $ 765.5 $ 672.7 Total debt $ 51.4 $ - Shareholders' equity $ 675.7 $ 602.6 GAZ MÃ‰TRO LIMITED PARTNERSHIP Fiscal years ended September 30 (in millions of dollars, except for unit data, which is in dollars, and unless otherwise indicated) 2012 2011 (audited) (audited) CONSOLIDATED INCOME AND CASH FLOWS Revenues $ 1,907.6 $ 1,962.8 Gross margin $ 780.6 $ 747.5 Net income attributable to the Partners of Gaz MÃ©tro $ 143.8 $ 164.0 Cash flows related to operating activities $ 428.8 $ 404.7 Purchases of property, plant and equipment $ 456.4 $ 201.2 Changes in deferred charges and credits $ 146.3 $ 113.1 Basic and diluted net income per unit attributable to the Partners of Gaz MÃ©tro $ 1.10 $ 1.30 Distributions declared per unit to the Partners of Gaz MÃ©tro $ 1.12 $ 1.12 Weighted average number of units outstanding (in millions) 130.9 126.2 OTHER INFORMATION Authorized rate of return on deemed common equity (Gaz MÃ©tro's natural gas distribution activity in Quebec) (2) 9.69 % 9.09 % Realized rate of return on deemed common equity (Gaz MÃ©tro's natural gas distribution activity in Quebec) (3) 10.22 % 10.08 % Credit ratings First mortgage bonds (S&P/DBRS) (4) A/A A/A Commercial paper (S&P/DBRS) (4) A-1(low)/R-1(low) A-1(low)/R-1(low) CONSOLIDATED BALANCE SHEETS September 30, September 30, 2012 2011 (audited) (audited) Total assets $ 5,118.0 $ 3,727.2 Total debt $ 2,474.1 $ 1,762.9 Partners' equity attributable to the Partners of Gaz MÃ©tro $ 1,303.3 $ 1,023.3 Partners' equity per unit attributable to the Partners of Gaz MÃ©tro $ 8.77 $ 8.10
(1) On June 6, 2012, Valener issued 4,000,000 Series A preferred shares at a per-share price of $25.00 each. (2) Including the sharing of productivity gains, if applicable, and excluding the Global Energy Efficiency Plan incentive. (3) The realized rate of return in 2012 is subject to the approval of the RÃ©gie de l'Ã©nergie, and the realized rate of return in 2011 was approved upon the RÃ©gie de l'Ã©nergie's decision in June 2012. (4) Through its General Partner, Gaz MÃ©tro inc.
SOURCE VALENER INC.