Unregulated business grows at Ascendant
Ascendant Group Ltd’s financial performance improved on the back of strong growth in its unregulated businesses.
The company said today that core earnings for 2017 were $18.8 million, up nearly $5 million, or 43 per cent, on 2016.
Core earnings broke down to $1.90 per share, boosted by a 28 cent-per-share boost businesses other than regulated power utility Belco, which include AirCare.
Corporate expenses fell by $2.54 million to $8.31 million.
Net earnings totalled $20.2 million, down by $4.7 million from 2016, driven by the non-recurring $11.7 million gain on the 2016 sale of Bermuda Gas.
Ascendant’s board approved a quarterly dividend payment of 11.25 cents per share, unchanged from the previous three-month period.
“Our performance in 2017 was very strong from a financial and operational perspective,” Sean Durfy, chief executive officer of Ascendant Group and Belco, said. “Belco delivered to expectations while our non-regulated businesses showed tremendous growth.
“Our solid results allowed us to further strengthen our balance sheet by paying down debt. This positions us financially to embark on the construction of the 56-megawatt North Power Station and related Battery Energy Storage System projects that will replace 50 per cent of our existing engine capacity that is well beyond its useful service life.
“This is a defining moment in the history of our company and allows us to continue to provide Bermuda a reliable electricity supply.”
The company said funds from operations increased 29 per cent to $42.4 million for 2017 compared to $33 million in 2016. Free cashflow was $21.7 million, up from $16.1 million.
Belco welcomed the decision of the Regulatory Authority to give the go-ahead for the decommissioning of ageing generators totalling 80 megawatts of capacity and their replacement with the North Power Station.
Mr Durfy said the benefits of the new engines included more cost-effective generation, increased system reliability, cleaner operations for the environment and a significant decrease in the vibration and noise levels now experienced by nearby residents.
Ascendant said it had developed a “cohesive strategic plan to lower Belco’s rates and increase shareholder returns”.
The company said it would continue to grow its unregulated businesses by offering new products and services to customers as well as through acquisitions.
And Belco is to begin a five-year programme to upgrade the grid’s transmission and distribution systems, which include lines and substations.
Ascendant’s strategic plan includes:
• Transition by Belco to a productive and stable regulatory environment that supports the investment required to deliver reliable power to its customers.
• To execute on Belco’s Capital Plan; in investment of approximately $250 million that is required to modernise Belco’s power generation and delivery systems in Bermuda including implementing new technologies such as battery storage, advanced metering infrastructure and system improvements to support the addition of renewable energy.
• Achieve a more competitive capital structure by using appropriate amounts of low-cost, long-term debt and accessing equity at the lowest possible cost.
• Reduce cost structure by investing wisely and by increasing the efficiency of operations by benchmarking our performance to like jurisdictions.
• Grow its non-regulated businesses, as well as invest in electrifying transportation in Bermuda.