March 17, 2010 - Financial releases
Montréal, March 17, 2010 – Gaz Métro Limited Partnership (Gaz Métro) (TSX: GZM.UN) presented its Partners with the results for fiscal year 2009 and the first quarter of 2010 at its Annual Meeting today. Sophie Brochu, President and Chief Executive Officer, also mentioned some future projects that will contribute to guiding the Partnership toward its sustainable performance ambitions.
Fiscal year 2009: Solid results despite the economic slowdown
Gaz Métro's adjusted net income rose to $159.6 million in 2009, $6.3 million more than in the previous fiscal year, resulting in adjusted net income of $1.32 per unit, $0.05 more than in fiscal year 2008. Despite a generalized adverse economic climate, Gaz Métro maintained its distributions to its Partners at $1.24 per unit in 2009, the same level as in the preceding fiscal year.
Gaz Métro continues to reap the rewards from the strategy it has been pursuing for the last few years of diversifying its activities, territories and operations in a judicious and targeted manner. While natural gas distribution in Québec remains the Partnership's flagship, activities other than gas distribution in Québec represented more than 25% of Gaz Métro's adjusted net income in 2009, compared with 18% in 2008. “Gaz Métro has a portfolio of resilient and complementary activities that offer the balance and stability its Partners seek,” Sophie Brochu emphasized.
1st quarter 2010: Encouraging outlook
Gaz Métro ended the first financial quarter of its fiscal year 2010 with adjusted net income of $79.1 million, or $0.66 per unit, an increase of more than 11% compared with the same period a year ago. This increase is due primarily to the good results of the gas distribution activity in Québec and the natural gas transportation sector.
Over the last 12 months, Gaz Métro has offered natural gas to its customers at a price below that of the last six years. Natural gas is now competitive on all markets and compared with all other forms of energy.
The competitive advantage of natural gas is contributing directly to the vitality in Gaz Métro's new contract signings. The number of new contracts signed in residential and commercial markets in Québec in the first quarter of 2010 was almost 15% higher than in the same period last year. This result surpasses, by even more than 2%, the number of contracts signed in the first quarter of fiscal year 2008, a record year for Gaz Métro.
The financial results for the first quarter of the current fiscal year, as well as the relatively favourable market conditions, mean that Gaz Métro can view 2010 with cautious optimism.
In the course of that annual meeting, Sophie Brochu informed the Partners that the Board of Directors of Gaz Métro inc., the General Partner of Gaz Métro Limited Partnership and a wholly-owned subsidiary of Noverco Inc., continues to analyze the various options available to Gaz Métro in the context of the changes to the tax treatment of limited partnerships and income trusts which qualify as “specified investment flow-through” entities (SIFT).
In relation thereto, a committee of the board composed of independent directors only has been created to assess the implications for public unitholders of the contemplated options, and discussions have been initiated with the Canada Revenue Agency.
“The intention is that the public investors would remain stakeholders of Gaz Métro. Regardless of the alternative chosen, it is expected to be effective on or around September 30, 2010 in order to benefit for as long as possible from the attractive tax treatment provided by the current structure,” also mentioned Sophie Brochu.
Future projects: Promising and sustainable energy solutions
In the coming months, Gaz Métro has several projects that fortify its complementary and inclusive vision of energy: a vision that sees energy and the environment as compatible.
Natural gas for vehicles (NGV): Gaz Métro is working at extending its commercial reach into the road transport sector – responsible for 40% of the greenhouse gas (GHG) emissions in Québec – where, in particular, it is targeting fleets of heavy trucks that run on diesel fuel. “We know that vehicles that use natural gas can reduce GHG emissions by approximately 25% compared with diesel and other petroleum fuels. It is an existing and applicable solution for reducing the environmental footprint of this economic activity. We have high hopes of bringing this field of activity to life in Québec,” Sophie Brochu added.
Biomethanation: The search for compatibility between energy and the environment is paving the way for another commercial opportunity for Gaz Métro, which is the biomethanation of organic wastes. Gaz Métro is thus working with various partners to determine technical and economical ways of injecting this new type of gas into its network, while continuing to ensure a reliable and secure service.
Wind power: Gaz Métro and its partner, Boralex Inc., last summer obtained a decree from the Québec government authorizing the construction of two wind farms with a total installed capacity of 272 megawatts on Seigneurie de Beaupré lands. Commissioning is expected in December 2013.
“In 2010 we will be developing, among other things, our financing strategy for this project, worth about $800 million,” Sophie Brochu added.
From natural gas distributor to energeticist
Building on the solid foundations laid by the transportation and distribution of natural gas, Gaz Métro's activities today are leaning toward promising energy operations and projects: the distribution of electricity in Vermont, the production of wind power, the use of natural gas as a fuel, and organic waste reclamation. “Our ambition is to make Gaz Métro an avant-garde enterprise in the field of energy and an essential partner in a Québec society resolutely looking toward the future,” concluded the President and Chief Executive Officer of Gaz Métro, Sophie Brochu.
Webcast of the Annual Meeting
Partners, media and others who are interested are invited to listen to a recording of the audio content and slides shown at the Annual Partners Meeting on the Gaz Métro Internet site in the section “Webcasts.” The recording will be available for a period of 90 days.
Gaz Métro Overview
With over $3.5 billion in assets, Gaz Métro is Quebec's leading natural gas distributor. Operating in this regulated industry for over 50 years, Gaz Métro has become the trusted energy provider to some 180,000 customers in Quebec and 136,000 customers in Vermont while developing the skills and expertise needed to diversify beyond natural gas. Gaz Métro's prudent growth strategy has been marked by the successful entry into electricity distribution in Vermont and development of wind power projects in Quebec. Offering historically strong and stable distributions and showing a competitive spirit, Gaz Métro is committed to its customers, Partners, employees and the community. Gaz Métro's units are listed on the Toronto Stock Exchange under the symbol GZM.UN.
Cautionary note regarding forward-looking statements
Certain statements in this press release may be forward-looking pursuant to applicable securities laws. Such forward-looking information reflects the intentions, plans, expectations and opinions of the management of Gaz Métro inc. (GMi), Gaz Métro's general partner, and is based on information currently available to management and on assumptions with respect to future events. The words “plans”, “expects”, “estimates”, “forecasts”, “intends”, “anticipates” or “believes”, or similar expressions, including the negative of these terms and future or conditional forms, often identify forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties and other factors outside management's control. A number of factors could cause actual results of Gaz Métro and GMi to differ materially from the results discussed in the forward-looking statements, including, but not limited to, terms of decisions rendered by regulatory bodies, general economic conditions, the competitiveness of natural gas in relation to other energy sources, the reliability of natural gas supplies, the integrity of the natural gas distribution system, exchange rates fluctuations and other factors described in the 2009 Annual Information Form of each of Gaz Métro and GMi under the item “Risks”, and in the Management's Discussion and Analysis of each of Gaz Métro and GMi for the quarter ended December 31, 2009.
Although the forward looking statements contained herein are based upon what management 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 State of Vermont will occur, that no significant event occurring outside the ordinary course of business, such as a natural disaster or other calamity, will occur, and other assumptions described in the Management's Discussion and Analysis of each of Gaz Métro and GMi for the quarter ended December 31, 2009, management 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 management 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 not to place undue reliance on these forward-looking statements.
Adjusted indicators not standardized in accordance with GAAPIn the view of Gaz Métro's management, certain “adjusted” indicators, such as adjusted net income and adjusted net income per unit provide readers with information it considers useful for analyzing its financial results. However, they are not standardized in accordance with Canadian generally accepted accounting principles (GAAP) and should not be considered in isolation or as substitutes for other performance measures that are in accordance with GAAP. The results obtained might not be comparable with similar indicators used by other issuers and should therefore only be considered as complementary information.