EARNINGS / BC Gas reports 1997 results
VANCOUVER, Feb. 5 /CNW/ - BC Gas Inc. today reported earnings per share
before non-recurring items for the year ended December 31, 1997 of $1.63, up
from $1.48 per share for the same period in 1996. The increase before non-
recurring items is a combined result of improved earnings, up from $61.6
million in 1996 to $65.2 million in 1997, and a reduction in the average
number of common shares outstanding resulting from the Company's continuing
share buyback program.
Including non-recurring gains and losses, 1997 net earnings were $50.8
million or $1.27 per share as compared to $105.6 million or $2.53 per share in
1996. Net earnings in 1997 included non-recurring losses of $0.36 per share
arising from costs incurred in anticipation of the disposition of the
Company's interest in NW Energy (Williams Lake) Limited Partnership (''NW
Energy'') and the restructuring program in BC Gas Utility Ltd. Net earnings
in 1996 included non-recurring items of $1.05 per share arising primarily from
the Company's sale of its investment in Inland Gas & Oil Ltd.
The table below sets out the contribution to earnings and earnings per
share by operating segment for the years ended December 31, 1997 and 1996.
>>
Net Earnings (Loss) (Unaudited):
(in millions of dollars except per share amounts)
Year ended December 31 1997 1996
----------------------------------------------------------------------
$ Per Share $ Per Share
-------------------------------------
Gas utility operations $ 50.2 $ 1.25 $ 46.9 $ 1.13
Oil pipeline operations 20.4 0.51 20.5 0.49
Related businesses (1.3) (0.03) 1.3 0.03
Corporate (BC Gas Inc.) (4.1) (0.10) (7.1) (0.17)
------- ------- ------- -------
Earnings before non-
recurring items 65.2 1.63 61.6 1.48
Non-recurring items (14.4) (0.36) 44.0 1.05
------- ------- ------- -------
Net earnings $ 50.8 $ 1.27 $105.6 $ 2.53
>>
Earnings in 1997 for the gas utility operations increased by $3.3 million
compared to 1996 primarily due to customer additions, increased margin from
industrial customers and revenues from the gas supply incentive mechanism,
offset by a decrease in the authorized return on common equity from 11.0% in
1996 to 10.25% in 1997.
Oil pipeline earnings for the year ended December 31, 1997 decreased by
$0.1 million compared to the same period in 1996. Reduced margins arising from
lower transportation volumes were substantially offset by reduced interest
charges as a result of lower interest rates and debt levels.
Related businesses comprise areas of activity related to energy and
utility services. Earnings from these businesses for the year ended December
31, 1997 were $2.6 million less than 1996 primarily as a result of the sale of
Inland Gas & Oil Ltd. in August, 1996.
BC Gas Inc. is the holding company for the BC Gas group of companies. The
improvement of $0.07 per share for the year ended December 31, 1997 compared
to 1996 is primarily due to reduced debt levels as a result of the sale of
Inland Gas & Oil Ltd., net of borrowings for the Company's share repurchase
program.
Non-recurring losses of $14.4 million or $0.36 per share for the year
ended December 31, 1997 are comprised of two items. The first is costs of
$13.7 million ($9.3 million or $0.23 per share after tax) the Company has
incurred in anticipation of the disposition of its interest in NW Energy
(Williams Lake) Limited Partnership (''NW Energy''). Discussions with British
Columbia Hydro and Power Authority (''B.C. Hydro'') relating to certain
aspects of the electricity purchase agreement between NW Energy and B.C. Hydro
are continuing but have not been completed. Given this situation, the Company
has determined that it is prudent to write off these costs in the year ended
December 31, 1997.
The second non-recurring loss is a provision of $9.4 million ($5.1
million or $0.13 per share after tax) for costs relating to the previously
announced restructuring program at BC Gas Utility Ltd. Annualized cost
reductions resulting from this restructuring, once fully implemented, will
amount to approximately $16.9 million. The majority of these productivity
benefits flow to customers in rates under the terms of the three year
regulatory settlement concluded in July 1997.
In August 1996, the Company announced a share repurchase program which,
as amended and extended, will allow the Company to repurchase up to 4.1
million of its common shares by August 1998. As at December 31, 1997,
approximately 3.1 million common shares have been repurchased at an average
price of $22.31 per share.
DIVIDEND NOTICE
The Directors of BC Gas Inc. have declared a quarterly dividend of $0.25
per share on the issued and outstanding COMMON SHARES of BC Gas Inc. The
dividend is payable on the 28th day of February, 1998 to Shareholders of
record at the close of business on the 12th day of February, 1998. |
