ENMAX Corporation today announced 2004 net earnings of $147.3 million, $10.8 million over the budget approved by the shareholder at the end of 2003. The return on shareholder’s equity for the year was 12.5%.
“The past year was highlighted by our continuing leadership in providing safe, reliable electricity,” said Al Buchignani, ENMAX interim chief executive officer. “We demonstrated that we have the capability to successfully adjust to changing market and regulatory conditions, and continue to make progress on our strategy.”
Net earnings in 2004 were substantially affected by two significant items:
1. Alberta Energy Utilities Board (EUB) decisions relating to the 2004 Distribution Tariff and Regulated Rate Tariff reduced net earnings by $28.3 million.
2. ENMAX Energy improved its process of estimating unbilled revenue relating to its electricity customers, resulting in a one-time adjustment of increased earnings of $42.7 million.
An unusual item that affected the 2003 results, the $14.9 million refund to ENMAX from the Alberta Electrical System Operator, was also a factor in the difference in net income between 2003 and 2004.
In addition to these factors, net earnings experienced downward pressure due to lower volumes and margins in the competitive energy business and higher grid charges in the wires business in 2004.
The combination of these factors led to a decrease in net earnings of $20.8 million, down from $168.1 million in 2003.
ENMAX lowered its general and administrative costs by $11.4 million in 2004, a reduction of 22% compared with the previous year, through a program of cost and staff rationalization initiated in late 2003.
During 2004, ENMAX’s capital expenditures were $96.2 million, about 70% of which served to expand the distribution and transmission system to meet customer growth.
In the fourth quarter of 2004, net earnings were $24.7 million, compared to $46.7 million in the fourth quarter of 2003. The reduction in net earnings was primarily due to the AESO regulatory refund in 2003, combined with the fourth quarter impact of the EUB decisions in 2004, relating to the 2004 Distribution Tariff and Regulated Rate Tariff.
During 2004, the company increased shareholder equity by 8% to $1.22 billion, increased assets by 19% to $1.71 billion and paid $50.4 million in dividends to its shareholder, The City of Calgary.
ENMAX’s 2004 consolidated financial statements and notes are available at enmax.com. More details will be provided in the 2004 annual report, scheduled for publication in April 2005.
ENMAX Corporation, a wholly owned subsidiary of The City of Calgary, provides electricity, natural gas, renewable energy and value-added services to more than 435,000 residential, commercial and industrial customers in Alberta through its subsidiary companies. For more information, visit our website at enmax.com.