Crown corps. expect better 2015

The provincial government hopes things return to normal this year after a financially stormy 2014 among the province’s Crown corporations.

“It bounces from year to year,” said Don McMorris, minister responsible for Crown Investments Corp., the holding company for the province’s Crown corporations.

By consolidating corporate results, CIC’s annual report shows the province’s Crowns as a single company that builds infrastructure, acquires debt and earns money.

It also pays dividends paid to the Crowns’ sole shareholder, the government of Saskatchewan — $173.6 million.

This year, CIC has budgeted for $262 million in dividends, though its acting president, Blair Swystun, noted, “it’s a little early yet to say whether things are looking up.”

Earnings in 2014 were well below the five-year average of $411 million, though CIC said the drop was due to SaskPower’s work on new and overhauled generation facilities and its higher fuel costs, plus more competition for SaskTel.

SaskEnergy’s income fell because of its need to buy gas to replace stocks used during the bitterly cold winter of 2013-14, then accept an accounting writedown on unsold gas.

Across the Crown corporation sector, the ratio of debt to equity was 60.1 per cent by 2014’s end, higher than the sectorwide target of 57.1 per cent. A rise to 61.6 per cent is expected this year.

The largest increase was at SaskPower, which added $873.8 million in debt, while SaskEnergy added $115.6 million and SaskTel $85.6 million.

The CIC annual report noted that consolidated debt has increased by $3.3 billion over the last five years, though Crown corporations’ assets have increased by $5.4 billion in the same period.

SaskPower’sdebt-equity ratio now is 73.1 per cent, above the 61.3-per-cent ratio among Crown-owned power generators in other provinces, and approaching the 75 per cent CIC feels is the upper limit.

CIC’s annual report said this level is being watched carefully, though it’s aware SaskPower must replace old equipment and serve new customers. Dividends from it have been suspended for 2014 and 2015.