CALGARY, AB, Feb. 23, 2022 /CNW/ - ATCO Ltd. (TSX:
ACO.X) (TSX: ACO.Y)
ATCO Ltd. (ATCO or the Company) today announced adjusted
earnings in 2021 of $382 million
($3.35 per share), which were
$30 million ($0.27 per share) higher compared to $352 million ($3.08
per share) in 2020. Fourth quarter adjusted earnings in 2021 of
$114 million ($1.01 per share), were $8
million ($0.06 per share)
lower compared to $122 million
($1.07 per share) in the fourth
quarter of 2020.
2021 earnings attributable to Class I and Class II Shares
reported in accordance with International Financial Reporting
Standards (IFRS earnings), were $246
million ($2.16 per share),
which were $6 million ($0.05 per share) lower compared to $252 million ($2.21
per share) in 2020. Fourth quarter 2021 IFRS earnings of
$99 million ($0.87 per share), were $33
million ($0.29 per share)
higher compared to $66 million
($0.58 per share) in the fourth
quarter of 2020.
IFRS earnings include timing adjustments related to
rate-regulated activities, unrealized gains or losses on
mark-to-market forward and swap commodity contracts, one-time gains
and losses, impairments, and items that are not in the normal
course of business or a result of day-to-day operations. These
items are not included in adjusted earnings.
RECENT DEVELOPMENTS IN THE FOURTH QUARTER OF 2021
ATCO Structures
- Awarded a second 150-person expansion camp valued at
$22 million for the China Lake
Military Base rebuild and expansion project in southern
California. The camp is expected
to be completed in the first quarter of 2022.
- Received Full Notice to Proceed for the construction of a
2,500-person accommodation village to support the construction of a
second LNG train for the Bechtel Pluto Train II project in
Western Australia. In February 2020, ATCO Structures was initially
awarded two Limited Notice to Proceed contracts related to this
project, then in the second quarter of 2020 the project was
suspended.
ATCO Frontec
- Received notification in December
2021 from BC Hydro that it had exercised its right to extend
the agreement term for the Site C camp from December 31, 2022 to December 31, 2024.
- Secured two Facility Maintenance and Site Services contracts
with Defence Construction Canada to maintain 15 different
Department of National Defence sites and the associated
infrastructure across Alberta for
a 5-year base period for a combined contracted revenue of
$25 million. Both contracts contain
options for an additional 6-year period, with a maximum contract
term up to 11 years. Mobilization activities are underway and are
on track for operations to commence in the second quarter of
2022.
- In December 2021, ATCO Frontec
was awarded the Phase 2 expansion of the workforce lodging services
contract (Naval Berthing Camp) to support additional construction
work at the China Lake Military base, bringing camp capacity to
700-people. Operations of this expansion will begin in the second
quarter of 2022.
- Subsequent to year-end, on February 1,
2022, Nasittuq Corporation (Nasittuq), a partnership between
ATCO Frontec and the Pan Arctic Inuit Logistics Corporation (PAIL),
was awarded by the Government of Canada a seven-year contract to operate and
maintain the North Warning System (NWS), beginning April 1, 2022. Under the contract, Nasittuq will
operate and maintain 47 remote NWS sites in the Canadian Arctic and
three facilities in Ontario.
Canadian Utilities
- Announced the acquisition of the Alberta Hub natural gas
storage facility near Edson,
Alberta. The Alberta Hub underground natural gas storage
facility has a capacity of approximately 49 petajoules and is
connected to the NOVA Gas Transmission (NGTL) system.
Corporate
- On January 18, 2022, ATCO
announced a comprehensive set of 2030 environmental, social and
governance targets, and a commitment to achieve net zero greenhouse
gas (GHG) emissions by 2050.
- On January 13, 2022, ATCO
declared a first quarter dividend of 46.17
cents per share or $1.85 per
share on an annualized basis per Class I Non-Voting and Class II
Voting Share, a 3 per cent increase over the 44.83 cents paid in each of the four previous
quarters. ATCO has increased its dividend per share for 29
consecutive years.
FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED
EARNINGS
A financial summary of the consolidated subsidiaries of ATCO and
a reconciliation of adjusted earnings to earnings attributable to
Class I and Class II Shares is provided below:
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For the Three
Months Ended December
31
|
For the
Year Ended December
31
|
($ millions except
share data)
|
2021
|
2020
|
2021
|
2020
|
|
|
|
|
|
Consolidated adjusted
earnings
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114
|
122
|
382
|
352
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Impairment and other
costs (1)
|
—
|
—
|
(33)
|
(20)
|
Unrealized gains
(losses) on mark-to-market forward and swap commodity contracts (2)
|
2
|
(4)
|
(10)
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(4)
|
Rate-regulated
activities (3)
|
(15)
|
(15)
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(64)
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(32)
|
IT Common Matters
decision (4)
|
(2)
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(5)
|
(7)
|
(10)
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Transition of managed
IT services (5)
|
(1)
|
(32)
|
(24)
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(32)
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Other
|
1
|
—
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2
|
(2)
|
|
|
|
|
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Earnings attributable
to Class I and Class II Shares
|
99
|
66
|
246
|
252
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Weighted average
shares outstanding (millions of shares)
|
114.1
|
114.4
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114.2
|
114.4
|
|
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(1)
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In 2021, ATCO
recorded impairments and other costs not in the normal course of
business of $33 million (after-tax and non-controlling interests).
Canadian Utilities incurred $28 million of these costs in Mexico,
related mainly to its Veracruz hydro facility within its Energy
Infrastructure segment. The charge reflects an adverse arbitration
decision, changes in market regulations, ongoing political
uncertainty, and a challenging operating environment, resulting in
an impairment of the carrying value of the assets. Other costs
recorded were individually immaterial.
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(2)
|
The Company's retail
electricity and natural gas business in Alberta enters into
fixed-price swap commodity contracts to manage exposure to
electricity and natural gas prices and volumes. These contracts are
measured at fair value. Unrealized gains and losses due to changes
in the fair value of the fixed-price swap commodity contracts are
recognized in the earnings of the Corporate & Other segment.
Realized gains or losses are recognized in adjusted earnings when
the commodity contracts are settled.
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(3)
|
The Company records
significant timing adjustments as a result of the differences
between rate-regulated accounting and International Financial
Reporting Standards with respect to additional revenues billed in
current year, revenues to be billed in future years, regulatory
decisions received, and settlement of regulatory decisions and
other items.
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(4)
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Consistent with the
treatment of the gain on sale in 2014 from the IT services business
by the Company, financial impacts associated with the IT Common
Matters decision are excluded from adjusted
earnings.
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(5)
|
In the fourth quarter
of 2020 and first quarter of 2021, the Company signed Master
Services Agreements (MSA) with IBM Canada Ltd. (subsequently
novated to Kyndryl Canada Ltd.) and IBM Australia Limited,
respectively, to provide managed IT services. These services were
previously provided by Wipro under a ten-year MSA expiring in
December 2024. The transition of the managed IT services from Wipro
to IBM commenced on February 1, 2021 and is complete.
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This news release should be read in concert with the full
disclosure documents. ATCO's consolidated financial statements and
management's discussion and analysis for the year ended
December 31, 2021 will be available on the ATCO website
(www.ATCO.com), via SEDAR (www.sedar.com) or can be requested from
the Company.
TELECONFERENCE AND WEBCAST
ATCO will hold a live teleconference and webcast at 10:00 am Mountain Time (12:00 pm Eastern Time) on Thursday, February 24, 2022 at 1-800-319-4610. No
pass code is required.
Katie Patrick, Executive Vice
President, Chief Financial & Investment Officer, will discuss
year-end 2021 financial results and recent developments. Opening
remarks will be followed by a question and answer period with
investment analysts. Participants are asked to please dial-in 10
minutes prior to the start and request to join the ATCO
teleconference.
Management invites interested parties to listen via live webcast
at:
https://www.atco.com/en-ca/about-us/investors/events-presentations.html
A replay of the teleconference will be available approximately
two hours after the conclusion of the call until March 24, 2022. Please call 1-800-319-6413 and
enter pass code 8321. An archive of the webcast will be available
on February 24, 2022 and a transcript
of the call will be posted on
https://www.atco.com/en-ca/about-us/investors/events-presentations.html
within a few business days.
With approximately 6,400 employees and assets of $23 billion, ATCO is a diversified global
corporation with investments in the essential services of
Structures & Logistics (workforce and residential housing,
innovative modular facilities, construction, site support services,
workforce lodging services, facility operations and maintenance,
defence operations services, and disaster and emergency management
services); Utilities (electricity and natural gas transmission and
distribution, and international operations); Energy Infrastructure
(energy storage, energy generation, industrial water solutions, and
clean fuels); Retail Energy (electricity and natural gas retail
sales, and whole-home solutions); Transportation (ports and
transportation logistics); and Commercial Real Estate. More
information can be found at www.ATCO.com.
Investor & Analyst
Inquiries:
Colin
Jackson
Senior Vice President, Finance, Treasury, Risk &
Sustainability
Colin.Jackson@atco.com
(403) 808 2636
Media Inquiries:
Kurt Kadatz
Senior Manager, Corporate Communications
Kurt.Kadatz@atco.com
(587) 228 4571
Subscription Inquiries:
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Non-GAAP and
Other Financial Measures This news release includes
references to "adjusted earnings" which is a "total of segments
measure" as that term is defined in National Instrument 52-112
Non-GAAP and Other Financial Measures Disclosure. The most directly
comparable measure reported in accordance with IFRS is "earnings
attributable to Class I and Class II shares". For additional
information, see "Financial Summary and Reconciliation of Adjusted
Earnings" in this news release, and "Non-GAAP and Other Financial
Measures" and "Reconciliation of Adjusted Earnings to Earnings
Attributable to Class I and Class II Shares" in Management's
Discussion and Analysis for the year-ended December 31,
2021.
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Forward-Looking
Information Certain statements contained in this news
release constitute forward-looking information. Forward-looking
information is often, but not always, identified by the use of
words such as "anticipate", "plan", "estimate", "expect", "may",
"will", "intend", "should", "goals", "targets", "strategy",
"future", and similar expressions. In particular, forward-looking
information in this news release includes, but is not limited to,
references to general strategic plans and targets, including with
respect to reducing GHG emissions; the timing for construction,
completion or the commencement of operations in relation to the
projects highlighted under "Recent Developments in the Fourth
Quarter of 2021" and the expected revenues or contract values
associated with such projects.
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Although the
Company believes that the expectations reflected in the
forward-looking information are reasonable based on the information
available on the date such statements are made and processes used
to prepare the information, such statements are not guarantees of
future performance and no assurance can be given that these
expectations will prove to be correct. Forward-looking information
should not be unduly relied upon. By their nature, these statements
involve a variety of assumptions, known and unknown risks and
uncertainties, and other factors, which may cause actual results,
levels of activity, and achievements to differ materially from
those anticipated in such forward-looking information. The
forward-looking information reflects the Company's beliefs and
assumptions with respect to, among other things, the Company's
ability to successfully achieve its net zero GHG target by 2050;
the development and performance of technology and technological
innovations and the ability to otherwise access and implement all
technology necessary to achieve GHG and other environmental, social
and governance targets; continuing collaboration with certain
regulatory and environmental groups; the performance of assets and
equipment; demand levels for oil, natural gas, gasoline, diesel and
other energy sources; certain levels of future energy use; future
production rates; future revenue and earnings; the ability to meet
current project schedules, and other assumptions inherent in
management's expectations in respect of the forward-looking
information identified herein.
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The Company's
actual results could differ materially from those anticipated in
this forward-looking information as a result of, among other
things, risks inherent in the performance of assets; capital
efficiencies and cost savings; applicable laws and government
policies; regulatory decisions; competitive factors in the
industries in which the Company operates; prevailing economic
conditions (including as may be affected by the COVID-19 pandemic);
credit risk; interest rate fluctuations; the availability and cost
of labour, materials, services, and infrastructure; the development
and execution of projects; prices of electricity, natural gas,
natural gas liquids, and renewable energy; the development and
performance of technology and new energy efficient products,
services, and programs including but not limited to the use of
zero-emission and renewable fuels, carbon capture, and storage,
electrification of equipment powered by zero-emission energy
sources and utilization and availability of carbon offsets; the
occurrence of unexpected events such as fires, severe weather
conditions, explosions, blow-outs, equipment failures,
transportation incidents, and other accidents or similar events;
and other risk factors, many of which are beyond the control of the
Company. Due to the interdependencies and correlation of these
factors, the impact of any one material assumption or risk on a
forward-looking statement cannot be determined with certainty.
Readers are cautioned that the foregoing lists are not exhaustive.
For additional information about the principal risks that the
Company faces, see "Business Risks and Risk Management" in
Management's Discussion and Analysis for the year-ended December
31, 2021.
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This news release
may contain information that constitutes future-oriented financial
information or financial outlook information, all of which are
subject to the same assumptions, risk factors, limitations and
qualifications set forth above. Readers are cautioned that the
assumptions used in the preparation of such information, although
considered reasonable at the time of preparation, may prove to be
imprecise or inaccurate and, as such, undue reliance should not be
placed on such future-oriented financial information or financial
outlook information. The Company's actual results, performance and
achievements could differ materially from those expressed in, or
implied by, the future-oriented financial information or financial
outlook information. The Company has included such information in
order to provide readers with a more complete perspective on its
future operations and its current expectations relating to its
future performance. Such information may not be appropriate for
other purposes and readers are cautioned that such information
should not be used for purposes other than those for which it has
been disclosed herein. Future-oriented financial information or
financial outlook information contained herein was made as of the
date of this news release.
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Any
forward-looking information contained in this news release
represents the Company's expectations as of the date hereof, and is
subject to change after such date. The Company disclaims any
intention or obligation to update or revise any forward-looking
information whether as a result of new information, future events
or otherwise, except as required by applicable securities
legislation.
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SOURCE ATCO Ltd.