News Release: Nalcor Energy releases third quarter financial results

November 8th, 2019

St. John’s, NL – Nalcor Energy reported its financial results for the third quarter of 2019.

“Construction of the Muskrat Falls Project is substantially complete and we are looking forward to first power in early 2020. Our other lines of business have also seen notable successes and we expect that it will continue into the fourth quarter. – Stan Marshall, President and CEO

Third Quarter Financial Highlights

  • Nalcor’s profit for the nine months ended September 30, 2019, was $106 million compared to a profit of $140 million for the same period in 2018, a decrease of $34 million. Key drivers of the decrease include lower oil production and higher royalties paid to the Province by Oil and Gas in addition to lower energy volumes available for export and lower export prices in Energy Trading. Also contributing to the decrease was the expensing of borrowing and operating costs in LCP Transmission as a result of the construction and commissioning of the Labrador Transmission Assets being substantially complete. These decreases were partially offset by adjustments related to the implementation of the final 2017 GRA Order in Q3 2019.
  • Capital expenditures for the nine months ended September 30, 2019, excluding the Maritime Link, were $926 million compared to $1,134 million for the same period in 2018, a decrease of $208 million. The decrease was a result of lower capital incurred within Muskrat Falls and LCP Transmission as construction of assets near completion, in addition to lower planned capital spend in Hydro Regulated.
  • Total assets as at September 30, 2019 were $19 billion compared to $18.8 billion as at December 31, 2018.
  • Debt to capital as at September 30, 2019 was 63 per cent, which is comparable to December 31, 2018.

Other Recent Developments

  • Overall construction of the Muskrat Falls Project now exceeds 99 per cent completion. All required concrete has been poured – a total of 680,000 cubic metres from the first pour in August 2014 to the final pour this October.
  • Impoundment (flooding of the reservoir) began in early August and water levels reached the final operating level of around 38.5 – to 39m in early September.
  • While GE, the contractor for the software for the Labrador-Island Transmission Link (LIL), continues to face challenges, they remain committed to delivering the quality software needed to operate LIL safely and reliably. It is anticipated that LIL will operate at varying levels in 2020 during the commissioning process.
  • NL Hydro received approval for its general rate application from the Public Utilities Board (PUB). On October 1, most island customers saw an increase in rates of 6.4 per cent while most customers in Labrador (or on the Labrador Interconnected System) saw a decrease in rates of 3.1 per cent.
  • Other lines of business continue to meet their quarterly goals. Churchill Falls has successfully completed its 2019 maintenance season. Specific achievements include the completion of the A3 Unit modernization project and the A3 230Kv oil-filled cable replacement.
  • Nalcor Oil and Gas completed its 2019 seismic program.
  • A 54 per cent completion rate has been achieved on the construction work of the West White Rose Project’s concrete gravity structure and related topsides. First oil is anticipated around the end of 2022.
  • Nalcor Energy – Bull Arm Fabrication signed an agreement with DF Barnes to host the ultra-deepwater semi-submersible drill rig, Transocean Barents, as it readies for further exploration work offshore Newfoundland in 2020.

 

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Media Contact:

Deanne Fisher

Director, Corporate Affairs and Corporate Planning

t: 709.733.5299 c: 709.697.3418 e: deannefisher@nalcorenergy.com