- Fortis (TSX:FTS) has reported steady financial results for the first quarter of 2020, despite ongoing market volatility
- Net earnings for the period came in at C$312 million, marginally up from $311 million in 2019
- The company attributed its resilience to the continued operation of critical infrastructure and regulatory-stabilised cash flows
- Fortis says it will stand by its 2020 capital expenditure budget, and does not anticipate any impact to its overall five-year capital plan
- Fortis (FTS) is currently steady at $54.61 per share, with a market cap of $25.35 billion
Fortis (TSX:FTS) has reported steady financial results for the first quarter of 2020, despite ongoing market volatility.
Based in St. John’s, Newfoundland and Labrador, the utility company operates in five Canadian provinces, nine US states and three Caribbean countries.
Its net earnings for the first quarter came in at C$312 million, marginally up from $311 million in the same period in 2019.
Fortis attributed its resilience to strong rate base growth, which was led by ITC and its Western Canadian utilities. However, any further increase in earnings was tempered by delayed rates and charges associated with financial market disruptions in Arizona.
Due to the nature of its business, the company has experienced relatively stable levels of demand, stemming from the need for the continued operation of critical infrastructure.
Certain regulatory mechanisms have also helped to stabilise cash flow, protecting roughly 63 per cent of Fortis’s annual revenue from changes in sales. While commercial sales dropped over the quarter, this was partially offset by increased residential sales as more people moved to work from home.
Barry Perry, President and CEO of Fortis, noted the valuable role the company plays in maintaining a level of normality in everyday life.
“The strength of our diversified business model was evident in the first quarter as our business performed well, reflecting modest impacts associated with the COVID-19 pandemic.
“Given the critical infrastructure we operate and the need to keep the lights on and natural gas flowing, we are focused on the health and safety of our employees, customers and communities, and the continued reliability of our systems,” he said.
In terms of liquidity, Fortis currently holds a strong position, supported by debt repayments made last year from its $1.2 billion common equity issuance and the $1 billion sale of its Waneta Expansion Hydroelectric Facility.
It was also noted that the company’s capital plan is progressing as normal, with $1.2 billion, or 28 per cent of the $4.3 billion 2020 capital plan, spent during the first quarter.
As such, Fortis is standing by its original capital expenditure estimates for the year, but acknowledged that the COVID-19 pandemic may still have a material impact. However, the company also said that any future impacts are not likely to affect its overall $18.8 billion five-year capital plan.
Fortis (FTS) is currently steady at $54.61 per share, as of 2:01pm EDT.