Advisory fees drive Ascendant to loss
Legal and financial advisory fees related to the sale of the Ascendant Group Ltd totalled $4.62 million in the first half of the year, contributing to a net loss of $1.9 million for the six-month period, the company reported.
The loss compared to a profit of $3.1 million for the same period in 2018.
The details were included in a filing with the Bermuda Stock Exchange.
Ascendant announced on June 3 that it had signed an agreement with Algonquin Power & Utilities Corp for the sale of the company for $36 per share, subject to shareholder and regulatory approval.
Shareholders gave the two-thirds approval of the total issued and outstanding shares of the company at a special general meeting on August 9.
The company is now awaiting approval from the Regulatory Authority and the Ministry of Finance. In a letter to shareholders that accompanied the six-month earnings report, chairman Peter Durhager said those approvals “may take several months”.
Ascendant’s year-to-date core earnings from operations before corporate expenses were $7.5 million for the first half of 2019, compared with $11.1 million for the same period a year ago.
The company said that was due in part to Belco’s base rate electricity sales falling by $3.9 million.
Belco’s total expenses increased, the company said, with depreciation associated with new assets higher by $600,000 and service allocations from Ascendant increasing by $700,000. Those expenses were offset by salary savings of $800,000 compared to the same period in 2018.
Ascendant said the company’s non-utility businesses continued to grow, with core earnings increasing $500,000 over the prior year.
The group’s core earnings year-to-date in 2019 were $2.7 million, compared to $4.1 million a year ago.
Corporate expenses dropped by $2.2 million in the first six months of the year, Ascendant said, as cost saving measures led to reduced personnel, directors’ costs and consultants’ fees. Cost recoveries from affiliates increased by $800,000 during the period.
Cashflow from operations, excluding the effect of working capital charges, totalled $9.8 million for the first half of 2019, compared to $14.1 million for the same period a year ago.
Capital expenditures for the first half of 2019 were $73.1 million, compared with $36.5 million for the same period of 2018.
The company said this increase reflected spending associated with Ascendant’s capital plan. Construction of the 10-megawatt battery storage system was completed, and construction of 56MW of replacement generation continues, the company reported.
Ascendant said a rate case was submitted in April 2019 to the Regulatory Authority in respect of the retail tariff methodology released by the RA in October 2018, which provided clarity on future rate-setting methods and timing.
“With these accomplishments, the company has laid the groundwork for Bermuda’s energy future,” the statement said.
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