Category: Uncategorized

ALTAGAS ANNOUNCES THIRD QUARTER 2022 RESULTS

HIGHLIGHTS
(all financial figures are unaudited and in Canadian dollars unless otherwise noted)

• Normalized EPS¹ of $0.10 and GAAP EPS² of $(0.17) in the third quarter of 2022 compared to $0.01 and $0.09 in the third quarter of 2021, respectively.
• Normalized FFO per share¹ of $0.60 and GAAP FFO per share³ of $(1.37) in the third quarter of 2022 compared to $0.59 and $0.75 in the third quarter of 2021, respectively.
• Normalized EBITDA¹ of $233 million and income before income taxes of $48 million in the third quarter of 2022 compared to $239 million⁴ and $89 million in the third quarter of 2021, respectively. Strong Utilities results were offset by a lower contribution from the Midstream segment.
• The Utilities segment reported normalized EBITDA of $115 million and income before income taxes⁵ of $54 million in the third quarter of 2022 compared to $62 million and income before income taxes of $102 million in the third quarter of 2021, respectively. Strong Utilities growth was driven by strong asset optimization activities, strong margins within the Retail Marketing Business and continued capital investments across the network.
• The Midstream segment reported normalized EBITDA of $108 million and income before income taxes of $71 million in the third quarter of 2022 compared to $181 million and $100 million in the third quarter of 2021, respectively. Strong Global Export volumes of approximately 110,000 Bbls/d of liquified petroleum gases (LPGs) were more than offset by a combination of mainly short-term factors, including lower realized Asian-to-Canadian butane spreads, high commodity price volatility, and higher rail and ocean freight costs.
• On May 26, 2022, AltaGas announced an agreement to sell its Alaskan Utilities to TriSummit Utilities Inc. (“TriSummit”) for US$800 million (approximately CAD$1.1 billion). Cash proceeds will be used to fund long-term growth opportunities and continue to strengthen the Company’s balance sheet, while concentrating AltaGas’ Utilities platform in the high growth Eastern U.S. region. AltaGas continues to progress the work required to gain all State and Federal approvals to close the divestiture and expects the transaction to close during the first quarter of 2023.
• On July 5, 2022, AltaGas purchased the remaining 25.97 percent of Petrogas Energy Corp. (“Petrogas”) from Idemitsu Canada Corporation (“Idemitsu”), for total cash consideration of $285 million. The acquisition provides AltaGas the ability to further integrate and optimize the west coast LPG export platform and solidifies the Company’s position as the leading provider of North American LPGs from the west coast.
• Subsequent to the quarter-end, AltaGas, along with its partner Whitecap Resources Ltd. (“Whitecap”), were selected by the Government of Alberta to enter into an agreement for continued evaluation work on the Rolling Hills Carbon Sequestration Hub (“Rolling Hills”), northwest of Calgary, AB.
• On August 17, 2022, AltaGas closed its offering of $250 million of 7.35 percent Fixed-to-Fixed Rate Subordinated Notes, Series 2, due August 17, 2082. AltaGas used the net proceeds of the offering to redeem the cumulative redeemable five-year rate reset preferred shares, series C.

https://www.newswire.ca/news-releases/altagas-announces-third-quarter-2022-results-867209341.html

Fortis: Q3 Earnings Snapshot

AP – Fri Oct 28, 8:47AM CDT

ST. JOHN`S, Newfoundland (AP) _ Fortis Inc. (FTS) on Friday reported third-quarter net income of $249.9 million.

On a per-share basis, the St. john`S, Newfoundland-based company said it had net income of 52 cents. Earnings, adjusted for non-recurring costs, came to 54 cents per share.

The results exceeded Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of 50 cents per share.

The electric and gas utility posted revenue of $1.96 billion in the period.

Key inflation gauge for the Fed rose 0.5% in September, in line with expectations

• The core personal consumption expenditures price index in September increased 0.5% from the previous month and 5.1% from a year ago.
• Including food and energy, PCE inflation rose 0.3% for the month and 6.2% on a yearly basis.
• Personal spending rose 0.6%, more than expected amid the rise in prices.
• Compensation costs increased 1.2% in the third quarter, in line with estimates.

An economic gauge that the Federal Reserve follows closely showed that inflation stayed strong in September but mostly within expectations, the Bureau of Economic Analysis reported Friday.

The core personal consumption expenditures price index increased 0.5% from the previous month and accelerated 5.1% over the past 12 months, the report showed. The monthly gain was in line with Dow Jones estimates, while the annual increase was slightly below the 5.2% forecast.

Including food and energy, PCE inflation rose 0.3% for the month and 6.2% on a yearly basis, the same as in August.

The report comes as the Fed is prepared to enact its sixth interest rate increase of the year at its policy meeting next week. In an effort to combat inflation running at its fastest pace in nearly 40 years, the Fed has been raising rates, with increases totaling 3 percentage points thus far.

Markets widely expect the Fed to enact its fourth straight 0.75 percentage point increase at the meeting, but possibly slow down the pace of hikes after that.

The BEA also reported that personal income increased 0.4% in September, one-tenth of a percentage point above the estimate. Spending as gauged through personal consumption expenditures increased 0.6%, more than the 0.4% estimate.

However, when adjusted for inflation, spending rose just 0.3%. Disposable personal income, or what is left after taxes and other charges, rose 0.4% on the month but was flat on an inflation-adjusted basis.

The personal saving rate, which measures savings as a share of disposable income, was 3.1% for the month, down from 3.4% in August.

A separate release Friday showed that employment costs rose 1.2% for the third quarter, in line with estimates, according to the Bureau of Labor Statistics. On an annual basis, the employment cost index increased 5%, slightly lower than the 5.1% pace in the second quarter.

Fed officials watch Friday’s data points closely for clues about where costs are headed, particularly with a tight labor market in which there are 1.7 jobs per every available worker, according to recent BLS data.

The Fed prefers the PCE price reading to the more widely followed consumer price index from the BLS. The BEA measure adjusts for consumer behavior, in particular substitution of less expensive goods, to determine cost-of-living increases rather than simple price moves.

Markets think the Fed might downshift the pace of its rate hikes ahead. Futures pricing Friday morning indicated a nearly 60% chance that the central bank will increase rates 0.5 percentage point in December.

Covid cases, controls spread in China

• “Since the 20th National Party Congress kicked off on 16 October, domestic Covid case numbers have been clearly on an upward trajectory,” Nomura’s chief China economist Ting Lu and a team said in a report Thursday.
• The Nomura analysts said they expect China’s stringent Covid controls will remain at least until March, “when the political reshuffle will be fully completed and the new leaders fully take over the cabinet.”
• On Wednesday, Premier Li Keqiang headed a State Council meeting that called for promoting a pickup in growth in the fourth quarter, from the third, state media said

BEIJING — Covid controls in China have tightened in the last two weeks after more cities reported virus outbreaks.

The restrictions on business and social activity affected 9.2% of China’s gross domestic product as of Thursday, up from 7% on Oct. 16, according to Nomura’s model.

“Since the 20th National Party Congress kicked off on 16 October, domestic Covid case numbers have been clearly on an upward trajectory,” the firm’s chief China economist Ting Lu and a team said in a report Thursday. “The national lockdown situation has been getting … significantly worse.”

https://www.cnbc.com/2022/10/28/covid-cases-controls-spread-in-china.html

Earnings Due: Oct 28-Nov 4

Economic Calendar: Oct 31 – Nov 4

Monday October 31

China PMI

Japan industrial production, retail sales and consumer confidence

Euro zone real GDP and CPI

Germany retail sales

(10:30 a.m. ET) U.S. Chicago PMI for October.

(10:30 a.m. ET) U.S. Dallas Fed Manufacturing Activity for October.

Earnings include: Berkshire Hathaway Inc.; Capital Power Corp.; Capstone Mining Corp.; Cargojet Inc.; Gibson Energy Inc.; Mondelez International Inc.; Stryker Corp.

—

Tuesday November 1

China and Japan manufacturing PMI

(9:30 a.m. ET) Canada’s S&P Global Manufacturing PMI for October.

(9:45 a.m. ET) U.S. S&P Global Manufacturing PMI for October.

(10 a.m. ET) U.S. ISM Manufacturing PMI for October. The Street is expecting a reading of 50.0, down from 50.9 in September.

(10 a.m. ET) U.S. construction spending for September.

(10 a.m. ET) U.S. Job Openings and Labour Turnover Survey for September.

(6:30 p.m. ET) Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers appear before the Standing Senate Committee on Banking, Commerce and the Economy.

Also: Canadian and U.S. auto sales for October and U.S. Fed meeting begins.

Earnings include: Advanced Micro Devices Inc.; Colliers International Group Inc.; Eli Lilly and Co.; Ero Copper Corp.; International Petroleum Corp.; Ovintiv Inc.; Pfizer Inc.; T-Mobile US Inc.; Thomson Reuters Corp.; Topaz Energy Corp.; Uber Technologies Inc.

—

Wednesday November 2

Euro zone manufacturing PMI

Germany trade surplus and unemployment

(8:15 a.m. ET) U.S. ADP National Employment Report for October.

(2 p.m. ET) U.S. Fed announcement with chair Jerome Powell’s press briefing to follow.

Earnings include: Ballard Power Systems Inc.; Bausch + Lomb Corp.; Brookfield Infrastructure Partners LP; Brookfield Renewable Partners LP; Cenovus Energy Inc.; Ceridian HCM Holding Inc.; CVS Health Corp.; First Capital Reality Inc.; GFL Environmental Holdings Inc.; Great-West Lifeco Inc.; Green Thumb Industries Inc.; Maple Leaf Foods Inc.; MEG Energy Corp.; Nutrien Ltd.; Qualcomm Inc.; Secure Energy Services Inc.; Suncor Energy Inc.; Sun Life Financial Inc.; Waste Connections Inc.

—

Thursday November 3

(8:30 a.m. ET) Canada’s merchandise trade balance for September.

(8:30 a.m. ET) Canadian building permits for September.

(8:30 a.m. ET) U.S. initial jobless claims for week of Oct. 29. Estimate is 222,000, up 5,000 from the previous week.

(8:30 a.m. ET) U.S. productivity for Q3 (preliminary reading). The Street expects an annualized rate rise of 0.2 per cent with unit labour costs up 4.0 per cent.

(8:30 a.m. ET) U.S. goods and services trade deficit for September.

(10 a.m. ET) U.S. factory orders for September. Consensus is a month-over-month rise of 0.3 per cent.

(10 a.m. ET) U.S. ISM Services PMI.

(1:30 p.m. ET) Bank of Canada Deputy Governor Paul Beaudry makes opening remarks in Ottawa at the John Kuszczak Memorial Lecture

Also: Canada’s federal fiscal update

Earnings include: Amgen Inc.; Barrick Gold Corp.; Baytex Energy Corp.; BCE Inc.; Bombardier Inc.; Canadian Natural Resources Ltd.; ConocoPhillips; Enerplus Corp.; Fairfax Financial Holdings Ltd.; Gildan Activewear Inc.; IGM Financial Inc.; Kinaxis Inc.; Labrador Iron Ore Royalty Corp.; Lightspeed Commerce Inc.; Open Text Corp.; Parkland Fuel Corp.; Pembina Pipeline Corp.; Resolute Forest Products Inc.; Restaurant Brands International Inc.; RioCan REIT; Starbucks Corp.; TC Energy Corp.; TransAlta Renewables Inc.; Turquoise Hill Resources Ltd.; Wheaton Precious Metals Corp.

—

Friday November 4

Japan and euro zone PMI

(8:30 a.m. ET) Canadian employment for October. The Street expects an increase of 0.1 per cent, or 10,000 jobs from September with the unemployment rate rising 0.1 per cent to 5.3 per cent.

(8:30 a.m. ET) U.S. nonfarm payrolls for October. The consensus forecast is a rise of 200,000 from September with the unemployment rate increasing 0.1 per cent to 3.6 percent.

(10 a.m. ET) Canada’s Ivey PMI for October.

Earnings include: Alibaba ADR; ARC Resources Ltd.; Canada Goose Holdings Inc.; Duke Energy Corp.; Enbridge Inc.; Magna International Inc.; SNC-Lavalin Group Inc.; Telus International Inc.

Air Canada’s seat sales double, loss narrows as travel rebounds despite airport woes

Air Canada AC-T +3.21%increase more than doubled its seat sales in a chaotic summer as a rebound in travel allowed Canada’s largest airline to narrow its losses.

For the three months ending on Sept. 30, Air Canada lost $508-million, or $1.42 a share, compared with a loss of $640-million ($1.79) in the same period of 2021, Air Canada said on Friday.

Revenue for the period totalled $5.3-billion, up from $2.1-billion in the third quarter of 2021 and nearly matching the $5.5-billion mark set in the same period in 2019, before the pandemic grounded much of the world’s airlines and sent the industry into crisis.

Michael Rousseau, chief executive officer of Air Canada, said on a conference with analysts on Friday he was “very pleased” with the financial results. “They mark an import step in our recovery,” he said, pointing to the quarter’s $644-million operating income and 12.1-per-cent operating margin, the first positive numbers since the pandemic began.

Air Canada is emerging from the pandemic “stronger, more resilient and adaptable,” he said. “COVID has been one of the industry’s greatest challenges in both severity and duration.”

Air Canada to buy 15 more Canadian-built Airbus A220-300 aircraft

In a statement accompanying the earnings release, Air Canada said it flew about 11.5 million passengers in the third quarter, and expects strong demand to persist.

“Air Canada’s solid third-quarter results stem from the ongoing restoration of our extensive network, an improved operational performance, our modern and efficient fleet, as well as leading products and services and an incredible team of employees,” Mr. Rousseau said in a press release.

As travellers returned to flying in the summer, Canada’s major airports were overwhelmed and understaffed. Passengers faced long lines, holds on planes and lengthy delays retrieving their baggage. The companies and government agencies that operate at the airports blamed a shortage of workers and COVID-19 protocols.

“Thanks to the hard work and commitment of our employees, after a difficult June and July, we saw significant operational improvement throughout August and September, with the operation today now on par with prepandemic levels,” Mr. Rousseau said. “Still, we know many customers experienced disruptions travelling this summer, and we sincerely regret any inconveniences that have occurred.”

Investors reacted to the financial results by driving up Air Canada’s share price on the Toronto Stock Exchange by 4 per cent to $20. The share price has fallen by 9 per cent this year.

In the summer of 2019, before the pandemic, Air Canada made a profit of $636-million ($2.25 a share).

In third-quarter financial results released on Friday before markets opened, Air Canada said its operating capacity more than doubled from the same period of 2021. It flew at 79-per-cent of prepandemic seat capacity. Passenger revenue of $4.8-billion tripled from the third quarter of 2021, and operating revenue increased by 2.5 times.

For the fourth quarter of 2022, Air Canada said it will fly about 85 per cent of its prepandemic capacity.

Walter Spracklin, a Royal Bank of Canada stock analyst, said the results beat his expectations. Higher ticket prices offset fuel expenses, and fuller planes helped reduced per-seat costs, Mr. Spracklin said in a note to clients. “Overall, the quarter was above consensus and our estimates, indicating demand for travel was exceptionally strong,” he said.

Imperial Oil Q3 Profit More Than Doubles Compared With Year Ago, Raises Dividend

CALGARY — Imperial Oil Ltd. raised its quarterly dividend by nearly 30 per cent as it reported its third-quarter profit more than doubled compared with a year ago.

The company, which also says it plans to buy back up to $1.5 billion worth of its shares, will now pay a quarterly dividend of 44 cents per share, up from its previous dividend of 34 cents per share.

The increased payment to shareholders came as Imperial said its net income totalled $2.03 billion or $3.24 per diluted share for the quarter ended Sept. 30, up from a profit of $908 million or $1.29 per diluted share in the same quarter a year earlier.

Revenue and other income totalled $15.22 billion, up from $10.23 billion in the third quarter of 2021.

The company says upstream production in the third quarter averaged 430,000 gross oil-equivalent barrels per day compared with 435,000 in the same quarter last year.

In its downstream business, Imperial says quarterly refining throughput averaged 426,000 barrels per day, up from 404,000 in the third quarter of 2021, as capacity utilization hit 100 per cent compared with 94 per cent a year earlier.

This report by The Canadian Press was first published Oct. 28, 2022.

Companies in this story: (TSX:IMO)

Suncor To Acquire Teck Resources’ Stake In Fort Hills Oilsands Project For $1B

CALGARY — Suncor Energy says it has agreed to buy Teck Resources Ltd.’s 21.3 per cent stake in the Fort Hills oilsands project for approximately $1 billion.

The Calgary-based oil and gas company says upon closing of the deal, Suncor’s overall share in Fort Hills will increase to 75.4 per cent.

Suncor says in a release Wednesday that the deal will be funded by cash from asset sales currently underway.

With the completion of the deal, the other partner in the Fort Hills project will be TotalEnergies EP Canada Ltd., which holds a 24.6 per cent stake.

The transaction is subject to regulatory approval and is expected to close in the first quarter of 2023.

The Fort Hills oilsands project is located in Alberta’s Athabasca region, 90 km north of Fort McMurray.

This report by The Canadian Press was first published Oct. 26, 2022

Companies in this story: (TSX:SU)