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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Just Energy Group Inc | TSXV:JE | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.205 | 0.19 | 0.24 | 0 | 01:00:00 |
Recent Developments
As previously released, in February 2021, the State of Texas experienced extremely cold weather (“the Weather Event”), which, combined with sustained high prices for electricity, ultimately resulted in Just Energy receiving creditor protection under the Companies’ Creditors Arrangement Act (“CCAA”) from the Ontario Superior Court of Justice (Commercial List) (the “Court”) and under Chapter 15 of the Bankruptcy Code in the United States. Protection under the CCAA and Chapter 15 allows Just Energy to continue to serve all its customers and operate the business while it restructures its balance sheet.
As part of the CCAA filing, the Company entered into a USD $125 million Debtor-In-Possession (“DIP Facility”) and qualifying support agreements with its largest commodity supplier and ISO services provider.
On June 16, 2021, Texas Governor Greg Abbot signed House Bill 4492 (“HB 4492”), which provides a mechanism for recovery of certain costs incurred by various parties, including the Company, during the Weather Event. As previously announced, the Company continues to evaluate the recovery mechanisms authorized in HB 4492.
“We remain focused on our commitment to our customers, employees, partners, and our pursuit of growth in key markets,” said Scott Gahn, Just Energy’s President and Chief Executive Officer. Mr. Gahn added, “We also continue to work with our valued stakeholders to advance Just Energy towards a successful restructuring.”
Key Developments
Fiscal Fourth Quarter Financial Highlights: | ||||
For the three months ended March 31 | ||||
$ in thousands, except customer data | Fiscal 2021 | Fiscal 2020 | Change | |
Sales | $689,064 | $776,921 | -11% | |
Base gross margin1 | $130,699 | $180,420 | -28% | |
Base EBITDA2 | $53,794 | $74,632 | -28% | |
Total net Mass Markets (RCE) additions | 0 | (46,000) | NMF3 | |
Total net Commercial (RCE) additions | (19,000) | (75,000) | NMF3 | |
Full Year Financial Highlights: | ||||
For the years ended March 31 | ||||
$ in thousands, except customer data | Fiscal 2021 | Fiscal 2020 | Change | |
Sales | $2,740,037 | 3,153,652 | -13% | |
Base gross margin1 | $536,858 | $610,580 | -12% | |
Base EBITDA2 | $182,831 | $185,836 | -2% | |
Unlevered free cash flow2 | $90,822 | $103,345 | -12% | |
Total liquidity | $247,489 | $87,200 | 184% | |
RCE Mass Markets count | 1,187,000 | 1,323,000 | -10% | |
RCE Commercial count | 1,757,000 | 2,065,000 | -15% | |
1 “Base gross margin” represents gross margin adjusted to include the effect of applying IFRS Interpretation Committee Agenda Decision 11, Physical Settlement of Contracts to Buy or Sell a Non-Financial Item, for realized gains (losses) on derivative instruments and other. Base gross margin is a key measure used by management to assess performance and allocate resources. Management believes that these realized gains (losses) on derivative instruments reflect the long-term financial performance of Just Energy and thus has included them in the Base gross margin calculation.2See “Non-IFRS financial measures”3Not a meaningful figure.
Fiscal Fourth Quarter Expense Detail: | ||||||||||
For the three months ended March 31 | ||||||||||
($ thousands) | Fiscal 2021 | Fiscal 2020 | Change | |||||||
Administrative expenses1 | $29,884 | $46,051 | -35% | |||||||
Selling commission expenses | $28,295 | $36,983 | -23% | |||||||
Selling non-commission and marketing expense | $14,086 | $16,584 | -15% | |||||||
Bad debt expense | $7,301 | $13,197 | -45% |
1 Includes $0.07 million and $6.1 million of strategic review costs for the third quarter of fiscal 2021 and 2020, respectively.
Mass Markets Segment Performance
Mass Markets Operating Highlights: | ||||||
Fiscal 2021 | Fiscal 2020 | Change | ||||
Mass Markets gross margin on added/renewed (full year) | $307/RCE | $311/RCE | -1% | |||
Embedded gross margin1 ($ millions) | $1,026 | $1,380 | -26% | |||
Total gross (RCE) additions | 66,000 | 48,000 | 38% | |||
Attrition (trailing 12 months) | 15% | 25% | -40% | |||
Renewals (trailing 12 months) | 74% | 73% | 1% |
1See “Non-IFRS financial measures”
Mass Markets RCE Summary:
MASS MARKETS | 4/1/2020 | Additions | Attrition | Failed torenew | 3/31/2021 | Change | |
Gas | 349,000 | 7,000 | (46,000) | (27,000) | 283,000 | -19% | |
Electricity | 974,000 | 159,000 | (144,000) | (85,000) | 904,000 | -7% | |
Total Mass Markets RCEs | 1,323,000 | 166,000 | (190,000) | (112,000) | 1,187,000 | -10% |
Commercial Segment Performance
Commercial Operating Highlights: | |||||||
Fiscal 2021 | Fiscal 2020 | Change | |||||
Commercial gross margin on added/renewed(full year) | $72/RCE | $91/RCE | -21% | ||||
Embedded gross margin1($ millions) | $366 | $428 | -14% | ||||
Total gross commercial (RCE) additions | 79,000 | 85,000 | -7% | ||||
Attrition (trailing 12 months) | 12% | 11% | 9% | ||||
Renewals (trailing 12 months) | 51% | 56% | -9% |
1See “Non-IFRS financial measures
Commercial RCE Summary:
COMMERCIAL | 4/1/2020 | Additions | Attrition | Failed torenew | 3/31/2021 | Change | |
Gas | 397,000 | 52,000 | (49,000) | (27,000) | 373,000 | -6% | |
Electricity | 1,668,000 | 142,000 | (197,000) | (229,000) | 1,384,000 | -17% | |
Total Commercial RCEs | 2,065,000 | 194,000 | (246,000) | (256,000) | 1,757,000 | -15% |
Further information regarding the CCAA proceedings is available at the Monitor’s website at http://cfcanada.fticonsulting.com/justenergy. Information regarding the CCAA proceedings can also be obtained by calling the Monitor’s hotline at 416-649-8127 or 1-844-669-6340 or by email at justenergy@fticonsulting.com.
About Just Energy Group Inc.
Just Energy is a retail energy provider specializing in electricity and natural gas commodities and bringing energy efficient solutions and renewable energy options to customers. Currently operating in the United States and Canada, Just Energy serves residential and commercial customers. Just Energy is the parent company of Amigo Energy, Filter Group Inc., Hudson Energy, Interactive Energy Group, Tara Energy, and terrapass. Visit https://investors.justenergy.com/ to learn more.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements, including, without limitation, statements with respect to the implementation of HB 4492 by the Commission, the establishment of financing mechanisms for the payment of the (i) ancillary service charges above US $9,000/MWh during the extreme weather event in Texas in February 2021 (the “Weather Event”); (ii) reliability deployment price adders charged by the Electric Reliability Council of Texas, Inc. (“ERCOT”) during the Weather Event; and (iii) amounts owed to ERCOT due to defaults of competitive market participants, which were subsequently “short-paid” to market participants, including Just Energy, (collectively, the “Costs”) incurred by load-serving entities, and whether the Company may ultimately recover any amount of Costs. These statements are based on current expectations that involve several risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to, risks with respect to: the Commission deciding against establishing financing mechanisms to recover the Costs, Just Energy failing to meet the requirements under any rules established by the Commission with respect to financing mechanisms to recover the Costs, and any litigation with respect to the financing mechanism established by the Commission; the ability of the Company to continue as a going concern; the outcome of proceedings under CCAA proceedings with respect to the Company and similar legislation in the United States; the impact of any recovery of the Costs on the Company and/or its proceedings under CCAA and similar United States legislation; the outcome of any legislative or regulatory actions; the outcome of any invoice dispute with ERCOT; the outcome of potential litigation in connection with the Weather Event; the quantum of the financial loss to the Company from the Weather Event and its impact on the Company’s liquidity; the Company’s discussions with key stakeholders regarding the Weather Event and the CCAA proceedings and the outcome thereof; the impact of the evolving COVID-19 pandemic on the Company’s business, operations and sales; reliance on suppliers; uncertainties relating to the ultimate spread, severity and duration of COVID-19 and related adverse effects on the economies and financial markets of countries in which the Company operates; the ability of the Company to successfully implement its business continuity plans with respect to the COVID-19 pandemic; the Company’s ability to access sufficient capital to provide liquidity to manage its cash flow requirements; general economic, business and market conditions; the ability of management to execute its business plan; levels of customer natural gas and electricity consumption; extreme weather conditions; rates of customer additions and renewals; customer credit risk; rates of customer attrition; fluctuations in natural gas and electricity prices; interest and exchange rates; actions taken by governmental authorities including energy marketing regulation; increases in taxes and changes in government regulations and incentive programs; changes in regulatory regimes; results of litigation and decisions by regulatory authorities; competition; and dependence on certain suppliers. Additional information on these and other factors that could affect Just Energy’s operations or financial results are included in Just Energy’s annual information form and other reports on file with Canadian securities regulatory authorities which can be accessed through the SEDAR website at www.sedar.com on the U.S. Securities and Exchange Commission’s website at www.sec.gov or through Just Energy’s website at www.investors.justenergy.com.
NON-IFRS MEASURES
The financial measures such as “EBITDA”, “Base EBITDA, “Base gross margin”, “Free cash flow” “Unlevered free cash flow” and “Embedded gross margin” do not have a standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures presented by other companies. This financial measure should not be considered as an alternative to, or more meaningful than, net income (loss), cash flow from operating activities and other measures of financial performance as determined in accordance with IFRS, but the Company believes that these measures are useful in providing relative operational profitability of the Company’s business. Please refer to “Key Terms” in the Just Energy Annual Fiscal 2021’s Management’s Discussion and Analysis for the Company’s definition of “EBITDA” and other non-IFRS measures.
Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT: Michael CarterChief Financial OfficerJust Energymcarter@justenergy.com
or
InvestorsMichael CummingsAlpha IRPhone: (617) 982-0475 JE@alpha-ir.com
MonitorFTI Consulting Inc.Phone: 416-649-8127 or 1-844-669-6340justenergy@fticonsulting.com
MediaBoyd ErmanLongview CommunicationsPhone: 416-523-5885berman@longviewcomms.ca
Source: Just Energy Group Inc.
Supplemental Tables:
Financial and operating highlights | ||||||||||
For the years ended March 31. | ||||||||||
(thousands of dollars, except where indicated and per share amounts) | ||||||||||
Fiscal 2021 | Change | Fiscal 2020 | ||||||||
Sales | $ | 2,740,037 | (13 | )% | $ | 3,153,652 | ||||
Base gross margin1 | 536,858 | (12 | )% | 610,580 | ||||||
Administrative expenses2 | 142,391 | (15 | )% | 167,936 | ||||||
Selling commission expenses | 129,653 | (9 | )% | 142,682 | ||||||
Selling non-commission and marketing expense | 49,868 | (36 | )% | 78,138 | ||||||
Bad debt expense | 34,260 | (57 | )% | 80,050 | ||||||
Finance costs | 86,620 | (19 | )% | 106,945 | ||||||
Profit (loss) from continuing operations4 | (402,756 | ) | NMF3 | (298,233 | ) | |||||
Base EBITDA1 | 182,831 | (2 | )% | 185,836 | ||||||
Total gross mass markets (RCE) additions | 166,000 | (37 | )% | 262,000 | ||||||
Total gross commercial (RCE) additions | 194,000 | (57 | )% | 454,000 | ||||||
Total net mass markets (RCE) additions | (136,000 | ) | NMF3 | (227,000 | ) | |||||
Total net commercial (RCE) additions | (308,000 | ) | NMF3 | (16,000 | ) |
See “Non-IFRS financial measures” on page 7 of the MD&A.2 Includes $3.7 million and $13.9 million of Strategic Review costs for fiscal 2021 and 2020, respectively.3 Not a meaningful figure. 4 Profit (loss) includes the impact of unrealized gains (losses), which represents the mark to market of future commodity supply acquired to cover future customer demand as well as weather hedge contracts entered into as part of the Company’s risk management practice. The supply has been sold to customers at fixed prices, minimizing any realizable impact of mark to market gains and losses.
Balance sheet
(thousands of dollars) | ||||||
As at | As at | |||||
3/31/2021 | 3/31/2020 | |||||
Assets: | ||||||
Cash | $ | 215,989 | $ | 26,093 | ||
Trade and other receivables, net | 340,201 | 403,907 | ||||
Total fair value of derivative financial assets | 35,626 | 65,145 | ||||
Other current assets | 163,405 | 203,270 | ||||
Total assets | 1,091,806 | 1,215,833 | ||||
Liabilities: | ||||||
Trade payables and other | $ | 921,595 | $ | 685,665 | ||
Total fair value of derivative financial liabilities | 75,146 | 189,706 | ||||
Total long-term debt | 655,740 | 782,003 | ||||
Total liabilities | 1,686,628 | 1,711,121 |
Summary of Cash Flows | |||||||||
For the years ended March 31. | |||||||||
(thousands of dollars) | |||||||||
Fiscal 2021 | Fiscal 2020 | ||||||||
Operating activities | $ | 46,301 | $ | 41,137 | |||||
Investing activities | (6,937 | ) | (20,882 | ) | |||||
Financing activities, excluding dividends | 175,060 | 21,096 | |||||||
Effect of foreign currency translation | (24,527 | ) | (1,026 | ) | |||||
Increase in cash before dividends | 189,896 | 42,377 | |||||||
Dividends (cash payments) | - | (26,172 | ) | ||||||
Increase (decrease) in cash | 189,896 | 16,205 | |||||||
Cash and cash equivalents – beginning of period | 26,093 | 9,888 | |||||||
Cash and cash equivalents – end of period | $ | 215,989 | $ | 26,093 |
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