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To: Johnny Canuck who wrote (42760)	11/1/2005 9:09:37 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69362

Western acquisitions produce steady profit for N.L.-based Fortis Inc. Related Symbols: T.FTS 11/1/2005 3:38:00 PM HALIFAX (CP) - A buying spree of western Canadian utilities has paid off handsomely for Fortis Inc., of St. John's, N.L., producing profits that are ahead of schedule and cash for its expanding power distribution businesses. The utilities and real-estate company reported Tuesday net earnings of $37.4 million for the third quarter that ended Sept. 30. That compared with a profit of $25.5 million for the same quarter last year. A major slice of the profits came from the West, where FortisAlberta recorded $9.3 million in earnings. Quarterly reports say power consumption among the FortisAlberta's 412,000 customers is up about 4.3 per cent compared to the same time period last year. Meanwhile, Fortis Properties contributed $4.9 million of earnings, 14 per cent higher than last year, mainly because of the company's acquisition of three Greenwood Inn hotels in Alberta and Manitoba in early 2005. And in Ontario, earnings from non-regulated power generation businesses jumped to $7.8 million, almost four times the figure earned last year. Many Bay Street investment analysts viewed the Alberta expansion warily in May 2004, after Fortis borrowed heavily to buy the former Aquila Networks Canada Inc. in southern and central Alberta. It appeared a major leap for an East Coast company that had started out by earning steady, regulated returns from its stake in Newfoundland Power and Atlantic Canada real estate. "The market was a bit concerned about our ability to execute the transaction, to put the financing in place and to integrate the two businesses into our operation," said Barry Perry, the chief financial officer, in an interview Tuesday. However, the two western utilities, FortisAlberta and FortisBC, are now growing quickly, and the parent company projects it will spend $400 million in annual upgrades to its regulated utilities over the next five years. As the equity increases, the utilities can apply to regulators for a larger returns on the investment. "Generally increased investment to serve customers translates into higher earnings on a go-forward basis," said Perry. Investments in the controversial Chalillo dam in Belize are also poised to produce increased returns for the company. The firm met stiff opposition from environmental groups when it installed the dam in the Central American country as part of a plan to increase the output of a seven megawatt hydroelectric generation plant. The plant started using the increased water flow in September. "We're expecting our overall generation from that river system to move from 80 gigawatt hours annually to about 160 gigawatt hours in 2006," said Perry. That will double earnings from $4 million to about $8 million a year from the project, he predicts. Overall, earnings per share, reflecting a four-for-one stock split, rose to 36 cents from 27 cents. In breaking down operations, Fortis reported that: -Utilities in Canada produced $22.4 million of earnings, similar to last year. The net impact of several adjustments at FortisAlberta, FortisBC and FortisOntario and higher earnings at Maritime Electric helped offset lower quarterly profits at Newfoundland Power. -Utilities in the Caribbean contributed $6.2 million of earnings, almost 35 per cent higher than earnings for the third quarter last year. -It booked a $3.1 million after tax unrealized foreign exchange gain associated with the translation of $60 million US of corporate long-term debt. Fortis is a major energy company, with operations in Atlantic Canada, Ontario, Alberta and British Columbia. It also operates power businesses in the Caribbean and Central America. On the Toronto Stock Exchange, Fortis (TSX:FTS) shares gained 70 cents to close at $22.70, a 3.18 per cent gain from Monday.