Canadian Utilities Limited

Thank you for standing by. This is the conference operator. Welcome to the first quarter 2024 results conference call for Canadian Utilities Limited. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 0. I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Finance, Treasury, and Sustainability. Please go ahead, Mr. Jackson.

Thank you, and good morning, everyone. We are pleased you could join us for Canadian Utilities' first quarter 2024 conference call. With me today, we have Katie Patrick, Executive Vice President and Chief Financial Officer of Canadian Utilities, Wayne Stensby, Chief Operating Officer of Akko Energy Systems. Clint Workington, Executive Vice President and Chief Financial and Investment Officer of Akko Energy Systems. Bob Miles, Chief Operating Officer of Akko Empower. And Greg Stevenson, Chief Financial Officer of Akko Empower. Before we move into our formal agenda, we'd like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located. Today, we are speaking to you from our Akko Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy, comprised of the Siksika, the Kainai, the Pagani Nations, the Tutsinu Nation, and the Nakota Nations that include the Chukniki, Bears Paw and Good Stony First Nations. The city of Calgary is also home to the Midi Nation of Alberta, Districts 5 and 6. We honor and respect the diverse histories, language, ceremonies and culture of the Indigenous peoples who call these areas home. Katie will begin today with some opening comments on our financial results and recent company developments. followed by an update from Bob and Wayne on their respective business segments. Following our prepared remarks, the Canadian Utilities team will take questions from the investment community. We ask that questions be limited to two per analyst, and if you have additional questions, please re-enter the queue. Please follow up with the investor relations team for any detailed modeling questions. A replay of the conference call, a transcript, and a short supplementary presentation will be available following this call on our website at canadianutilities.com. Our remarks today will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian Securities Regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures, such as total of segment measures, adjusted earnings, adjusted earnings per share, and capital investment. These measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities. And now, I'll turn the call over to Katie for her opening remarks.

Thanks, Colin, and good morning, everyone. Thank you all for joining us today. Canadian utilities had a strong start to the year, delivering adjusted earnings of $225 million in the first quarter. This is up 4% from the same period in 2023. This translates to adjusted earnings per share of 83 cents. Atco Energy Systems delivered adjusted earnings of $221 million, an increase of 7% from Q1 last year. Results were driven by rate-based growth and an increase to our allowed ROEs from 8.5% to 9.28% across our Alberta-based utilities. ATCO Empower delivered adjusted earnings of $8 million in the quarter, down $7 million from the same period last year. The energy storage business continues to show strong performance. However, renewable generation experienced lower earnings year over year. Drought in southern Alberta, wind conditions below historical averages, as well as lower merchant prices contributed to the lower earnings profile. Beginning this quarter, Acto Australia is reported as a distinct segment. Previously, Acto Australia was reported in both the energy systems and end power segments. This change enhances our disclosure and aligns our reporting to how we think about the Australian business internally. This will allow us to provide more meaningful information on this segment as we move forward. Acto Australia delivered adjusted earnings of $11 million in Q1 2024, down from $60 million last year. year-over-year results were impacted mostly by lower CPI expectations. As a rule of thumb, every 10 basis points change in CPI results in approximately $1 million annual impact on the Australian business. And we are currently tracking approximately 1% lower than 2023. Operational execution remains a key priority for Australia, and the business is performing very well. We developed over 3,500 new gas connections during the quarter, an increase of 18% year-over-year, allowing us to grow haulage revenues during the quarter. We also received the draft AA6 response following our submission in late 2023. We are happy to see the draft includes provisions for 82,000 new customer connections through 2029. The proposed ROE was also increased to 8.47% reflecting a higher for longer interest rate environment. There is work to be done on aligning our views around operating efficiencies, capital levels, and accelerated depreciation. We look forward to collaborating with the regulator on how we can confidently invest in Australia, reduce uncertainty for consumers, and support Australia's rapidly evolving energy future. We will respond to this draft by June and expect the final AA6 framework to be finalized by November. We continue to evaluate numerous growth opportunities in Australia. Our engineering teams are developing energy storage projects that will complement our existing Osborne JV and other renewable power generation assets in the region. We look forward to providing additional updates later in the year as we make headway on these projects. Stepping back and looking at Canadian utilities as a whole, cash flow from operation was $502 million in the quarter, which supported our operations, capital program, and normal course financial commitments. We also repaid a $120 million CU Inc. deposit upon maturity with cash on hand. With that, let's dive into each segment in more detail. I will now turn the call over to Wayne to discuss the ATCO Energy Systems results.