May 6, 2005 - Press releases
Montreal, May 6, 2005 - Gaz Métro Limited Partnership (TSX: GZM.UN) reports Partners' income of $102.0 million for the second quarter of its 2005 fiscal year, compared to $106.9 million for the same period last year, i.e. a decrease of $4.9 million. Partners' income per unit is $0.88, down by $0.05 compared to the same quarter last year.
For the first six months of the 2005 fiscal year, Partners’ income is $174.3 million, or $1.51 per unit, compared to $178.7 million, or $1.56 per unit, for the same period last year.
Gaz Métro inc., on behalf of the Partnership, declared today an income distribution of $0.34 per unit, payable July 4, 2005 to Partners of record at the close of business on June 15, 2005.
Partners’ income from the Distribution Sector was $94.7 million for the quarter, down from $98.6 million in the second quarter last year. Normalized deliveries (for temperatures, in Quebec) are 2,083 million cubic metres of natural gas, 1.6% higher than the same quarter for the 2004 fiscal year. This increase can be explained by higher consumption in the industrial market and a segment of the commercial market, offset in part by a decrease in the consumption in Quebec for customers who use natural gas for space and water heating (the ?heating market?). However, the margins earned in the heating market, where per customer consumption is relatively small, are better than those in other markets, which means the impact on gross margin of the decrease in deliveries in the heating market, combined with lower distribution rates, could not be offset by the increases in other markets.
For the first six months of 2005, income from the Distribution Sector is down by 3.2% to $157.5 million from $162.7 million for the same period last year. Normalized volumes are 3,804 million cubic metres, an increase of 1.4% over the same period last year.
A number of areas were analyzed to understand the reasons for the decrease in heating market volumes in 2005. Part of the decrease can be explained by the growing number of customers that subscribed to an energy efficiency program. Other factors that could have an effect on natural gas consumption during a year, e.g. the amount of sun and wind velocity, were also examined. Our normalization methodology only takes account of the impact of temperatures. There are no normalization mechanisms for the other factors. It seems that wind velocity could have a significant impact on natural gas consumption. During the 2005 winter, wind velocity was an average of 20% less strong than in 2004, which means that buildings required less natural gas for space and water heating.
Partners’ income from the Transportation and Storage Sector is steady at $7.9 million for the second quarter of the 2005 fiscal year compared to the same period last year. For the first six months, it is up by 11.0% to $15.6 million due to the partial reversal of the reserve for the TQM lawsuit that was settled in the first quarter.
Partners’ income from the Energy Services and Other Sector is $1.0 million for the second quarter of 2005, an increase of $0.4 million over last year.
For the first six months of the 2005 fiscal year, income increased by $2.0 million to $4.1 million on account of revenue earned under a commercial agreement for the development of VDN Cable’s clientele by Gaz Métro. Following the conversion on December 1, 2004 of the VDN Cable debentures owned by Gaz Métro, its ownership interest increased to 47.5%. And, on February 1, 2005, Gaz Métro’s ownership interest increased to 49.8% following the conversion of a receivable from VDN Cable.
During the first six months of the current fiscal year, Gaz Métro invested $3.0 million in the Rabaska LNG terminal project with Enbridge Inc. and Gaz de France as partners.
On May 2, the project took a big step forward with the adoption by the City Council of Lévis, where the LNG terminal would be built, of a resolution supporting the pursuit of the project, it being understood the City plans to be an active participant in the approval process involving the various government authorities in order to ensure the concerns, expectations and needs of its citizens are heard.
For more details about the second quarter and the first six months of the 2005 fiscal year results, please refer to the Gaz Métro's Internet site . Rebroadcasts can be accessed for 30 days by telephone at 1 866 518-1010 or 416 695-5275 and on Gaz Métro's Internet site.
With more than $2 billion of assets and more than 1,500 employees in Quebec, Gaz Métro is a leading Quebec energy company and one of Canada’s largest natural gas distributors. Gaz Métro serves about 157,000 customers in Quebec through an underground pipeline network of almost 10,000 km. A subsidiary, Vermont Gas Systems, serves about 36,000 customers.
Gaz Métro also owns significant investment interests in two natural gas transmission enterprises (TQM and Portland Natural Gas Transmission System) and in an enterprise specializing in underground natural gas storage facilities (Intragaz). Gaz Métro also sells goods and services through various companies in the energy (Gaz Métropolitain Plus Group) and fibre optic fields (VDN Cable), and provides diagnosis and rehabilitation services for drinking water and waste water infrastructures (Aqua Data and Aqua-Rehab).
Source : Gaz Métro