TransCanada laid off 10% of staff in Q4, more on way
TransCanada Corp. said Thursday more layoffs are expected as the energy sector grapples with plunging oil prices, after confirming it let go 10 per cent of its workforce in the fourth quarter.
The Calgary-based pipeline company laid off staff in November, but did not provide numbers until Thursday’s earnings call to discuss fourth-quarter results. Chief financial officer Don Marchand said the layoffs cut more heavily into management positions, including vice-president and director positions.
“I wouldn’t say we’re done at this point,” Marchand said, adding the company continues to look for more duplication across its business.
Financial disclosure documents filed by the company Thursday show that TransCanada employs 500 fewer people now than it did a year ago. The company employed 5,512 employees at the end of December, compared with 6,059 employees at the end of 2014.
TransCanada posted a $2.5 billion net loss in the final quarter, thanks in large part to a $2.9-bil- lion impairment charge on its rejected Keystone XL pipeline.
“We were extremely disappointed by the arbitrary and unjust denial of the Keystone XL pipeline,” TransCanada president and CEO Russ Girling said on the company’s earnings call.
U.S. President Barack Obama formally rejected his company’s application for a permit to build the pipeline project between Alberta and the U.S. Gulf Coast in the fourth quarter.
In response, TransCanada initiated a $15 billion claim under the North American Free Trade Agreement and launched a lawsuit over the legality of the rejection in Texas.
“TransCanada will look for a way to make that project happen at some point in the future,” Girling said, adding that oil producers continue to need the line’s capacity.
Despite the large impairment charge, the company was able to increase its quarterly dividend by 18 cents, or nine per cent, to 56.5 cents per share.
Girling said the company is positioned to increase its dividend by eight to 10 per cent every year until 2020.
TransCanada also confirmed it’s on pace to bring $13 billion worth of projects into service by 2018, and is working on $45 billion in additional, larger scale projects over the longer term.
Girling also addressed the Canadian government’s decision to evaluate the company’s Energy East project’s contribution to the country’s total greenhouse gas emissions and said he believes the project will still be in service by 2020.
Among the other large-scale projects, TransCanada said it is continuing to work on its Coastal Gas Link and Prince Rupert Gas Transmission Line projects, which would deliver natural gas to pro- posed liquefied natural gas facilities in B.C.
To date, the company has spent $300 million and $400 million pushing both of those projects through Canada’s regulatory process.
In a research note, FirstEnergy Capital Corp. analyst Steven Paget said TransCanada’s results were in line with expectations, and posted adjusted earnings per share of 64 cents, compared with consensus expectations of 61 cents.
Girling said the company is working to make the company’s earnings and financial performance even more predictable.