Nalcor Energy reports first quarter financial results

May 11th, 2017

St. John’s, NL – Nalcor Energy reported its financial results for the first quarter of 2017 today.

“Nalcor Energy had strong earnings during the quarter. Over the past year, total assets have grown by about $2 billion, and as a company, we have been focused on continuing to execute our priority projects in an efficient and cost-effective manner in the interest of the province’s ratepayers and taxpayers.”

— Stan Marshall, President and CEO

First Quarter Financial Highlights

  • Profit of $57 million, an increase of approximately $29 million over the same period in 2016.
  • Funds from operations for the quarter of $100 million, an increase of $40 million over the same period in 2016.
  • Earnings before interest, taxes, depreciation and amortization (EBITDA) for the period of $117 million, a $38 million increase compared to the same period last year.
  • Capital expenditures (excluding Maritime Link) for the quarter of $548 million, an increase of $90 million over the same period in 2016.
  • Total assets grew by $0.4 billion during the first quarter of 2017 to $14.5 billion. Total assets have grown by approximately $2 billion from the same period in 2016.
  • Debt to capital as at March 31, 2017 was 60% compared to 61% at December 31, 2016.

First Quarter Earnings and Capital Expenditures

Profit for the three months ended March 31, 2017 was approximately $57 million, compared to $28 million for the same period in 2016. The primary factors contributing to the increase were: higher revenues from offshore oil as a result of increased production as well as higher global oil prices; higher electricity prices related to export energy sales; and a reduction in gas turbine fuel expense as well as the recognition of the Prudence Order in Q1 2016 in Hydro. Partially offsetting these increases were increased depletion and production costs associated with increased oil production; higher depreciation and amortization in Hydro and the Oil and Gas division of Offshore Development; increases in other fuel costs in Hydro; lower gains on commodity contracts in Offshore Development and Energy Markets; and reduced revenue in Power Supply as a result of the commencement of the Renewal Contract in September 2016 between Churchill Falls (Labrador) Corporation Limited and Hydro Quebec.

Capital expenditures (excluding Maritime Link) for the first quarter totaled approximately $548 million and primarily relate to the ongoing construction of the Lower Churchill Project generation and transmission components, as well as capital projects within Newfoundland and Labrador Hydro. Total capital expenditures for 2017, excluding those related to the Maritime Link, are forecast to be approximately $2.9 billion.

Nalcor’s Statement of Financial Position remains strong, with 60% debt to capital as at the end of the first quarter compared to 61% at December 31, 2016. This decrease was primarily due to increased shareholder contributions and profit, partially offset by an increase in net debt.

Other Recent Developments

Construction of the Lower Churchill Project progressed during the first quarter, on both the generation and transmission components. Targets for concrete placement for the powerhouse and intake were exceeded. The grouting work planned on the temporary cofferdam was completed and it continues to perform as designed. Construction and commissioning of the line connecting Churchill Falls to Muskrat Falls was approximately 92% complete as at the end of March. The 1,100 km Labrador-Island transmission link was approximately 76% complete to the end of March. All the right-of way clearing and construction of the access road was completed during Q1. On the Labrador portion of the link, all 1,282 towers have been erected, and on the island portion, more than 30% of tower installment has been completed, and stringing has commenced.  Several major pieces of equipment were delivered to the Soldiers Pond site, including five of seven transformers, three stators and three rotors, and are now ready for installation.

Newfoundland and Labrador Hydro has been carrying out the construction of the new 230 kV transmission line from the Bay d’Espoir generating plant to the Western Avalon Terminal Station. Installation of the transmission towers commenced in April, and the section between Chapel Arm and Come By Chance along the existing transmission corridor on the Trans-Canada Highway is now complete. The upgrade of this transmission corridor will strengthen the island electrical network by enabling additional power capacity for the Avalon Peninsula.

As part of the 2013 General Rate Application, Hydro submitted a compliance application to the Public Utilities Board in late January and recently received a compliance order from the Board. The 2013 GRA is now in its final stages, and work on Hydro’s 2017 GRA filing is ongoing.

In the Oil and Gas business, production volumes, revenue and depletion increased compared to the same period in 2016, as a result of drilling and completion activities at White Rose and Hibernia Southern Extension (HSE), combined with the continued use of water injection wells at HSE.  Hebron Project construction at the Bull Arm Fabrication site was recently completed and first oil for the project is anticipated later this year. In March, Nalcor issued a call for expressions of interest for opportunities for use of the Bull Arm site post-Hebron, and the resulting proposals are currently being assessed.

Nalcor’s first quarter webcast will take place today (May 11) at 10:30 a.m. NT.  A copy of the quarterly report and a recording of the webcast will be available at


Media Contact:

Deanne Fisher
Corporate Communications and Stakeholder Engagement
t: 709.733.5299
c: 709.697.3418