Electricity sales fall hits Ascendant profit
Declining electricity sales and the impact of Hurricane Humberto caused Ascendant Group Ltd’s earnings to fall in the third quarter.
The parent company of power utility Belco also took a $2.8 million restructuring charge related to the sale of the company.
Ascendant has accepted a takeover offer worth about $365 million from Canadian utilities group Algonquin Power and Utilities Corp. The deal was backed by shareholders in August and is awaiting approval from the Regulatory Authority.
Core earnings for the first nine months of the year decreased $3.9 million from 2018 to $19.2 million.
Year-to-date reported earnings, which take into account one-off items such as restructuring charges, totalled $8 million, down from $13.2 million over the same period of 2018.
Earnings of Ascendant’s non-Belco businesses climbed 29 per cent. These include AirCare Ltd, IFM Ltd, iEPC Ltd and Ascendant Properties Ltd.
Ascendant’s board of directors declared an unchanged quarterly dividend of 11.25 cents per common share.
Sean Durfy, Ascendant’s chief executive officer, said: “The company continues to implement the five-year plan begun in 2017 that seeks to reduce costs and grow our non-regulated businesses.
“In the third quarter we submitted an application to the Regulatory Authority as required in connection with the change in control of Bermuda Electric Light Company Ltd from Ascendant to Algonquin.
“Algonquin has a long track record of renewable energy generation in the North American market and has the capital resources, operational knowledge and experience in technological innovation to bring more renewable energy to Bermuda.
“Our ongoing efforts to reduce costs are also bearing fruit. While we continue to experience declining sales at Belco, costs savings are critical to keep rates in check.”
Dennis Pimentel, Belco’s president, said: “Belco has made great progress on the $120 million North Power Station replacement generation project and a roof-wetting ceremony was held in October to celebrate the completion of the main structure and roof.
“We were also pleased to have received an award for the best energy storage project at the Caribbean Renewable Energy Forum for our recently commissioned Nolan Smith Battery Energy Storage System.
“I would especially like to thank all the staff at Belco who worked tirelessly to restore the damage to the electricity system caused by Hurricane Humberto in September.
“While electricity sales continue to decline, we are positive that our new plant and ongoing cost savings initiatives through efficiency measures will enable us to continue to provide safe, cost-effective electricity for our valued customers.”
Capital expenditures for the first nine months of 2019 were $82.3 million compared to $54.8 million for the same period of 2018, as the company continued work on replacement generation, battery storage and transmission and distribution modernisation projects.
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