ENMAX Corporation today announced net earnings of $31.1 million in the first quarter of 2004. These solid earnings are only slightly lower than net earnings of $34.9 million in the first quarter of 2003, notwithstanding lower wholesale prices for electricity, increasing competition in the retail business and changes in Alberta’s income tax rates. 

“As anticipated, the market is putting downward pressure on electricity prices paid by consumers and in turn our retail margins,” said Bob Nicolay, ENMAX president and chief executive officer. “During the first three months of 2004, our strategies to offset this pressure were largely successful, delivering a return on equity of 12% on an annualized basis.” 

In the first quarter of 2004, the average Power Pool price in Alberta was $49 per megawatt hour (MWh) compared to $84 per MWh in the same period in 2003. This 42% decline in average wholesale prices led to reduced costs to the company for power purchases during the first three months of the year.  These savings were offset by customers on flow through rates paying lower electricity prices and fewer energy trading opportunities.

Proactive measures in the fall of 2003 successfully reduced ENMAX’s cost structure, enabling the company to record general and administrative expenses of $8.5 million in the first quarter of 2004 compared to $10.5 million in the first quarter of 2003.

“Our strategies to prosper even with declining margins in our retail business include lowering our cost structure and intensifying sales in the large commercial market,” said Nicolay. “As well, with a debt to total capitalization ratio of 16.6% at March 31, 2004, our balance sheet is well positioned to pursue profitable business development opportunities.”  
ENMAX continued to contribute a steady dividend stream to The City of Calgary, paying installments of $12.6 million in the first quarter of 2004 toward an annual dividend of $50.4 million.

The management’s discussion and analysis and interim financial statements for the first quarter of 2004 are available on ENMAX’s website (www.enmax.com) and on SEDAR (www.sedar.com).

ENMAX Corporation, a wholly owned subsidiary of The City of Calgary, provides electricity, natural gas and value-added services to more than 420,000 residential, commercial and industrial customers in Alberta through its subsidiary companies. For more information, please visit our website at enmax.com.