SaskWater earns $7.4M, pays first dividend as commercial outfit
SaskWater reported net income of $7.4 million on revenues of $59 million and paid its first-ever dividend of about $2 million for the 15-month period ended March 31, the Crown corporation said in its 2015-16 annual report released Wednesday.
(All Crown corporations were required to adopt the government’s fiscal year in 2015, meaning that an extra quarter was added to the Crowns’ fiscal year. For the calendar year, SaskWater’s net income was $6.4 million on $48 million in revenues in 2015 versus $5.5 million on $43.9 million in 2014.)
“SaskWater has maintained a focus on successfully growing its business and that is reflected in this report,” said Herb Cox, minister responsible for SaskWater, noting that SaskWater paid a dividend for the first time since becoming a commercial Crown corporation in 2002.
“It was a good year for us,’’ SaskWater president and CEO Doug Matthies said in an interview Wednesday. “(Last year) was a bit of a dry year, and so we saw an increase in potable water sales to municipal customers. Despite price challenges that the potash industry had, we also had higher nonpotable (water) volumes to our industrial customers, particularly a number of the (potash) mines.’’
Potable water distribution increased to 7.15 million cubic metres in 2015 from 6.86 million cubic metres in 2014, while nonpotable water sales increased to 37.5 million cubic metres from 30 million cubic metres during the same period. “We’re up 21 per cent (in 2015 over 2014),’’ said Matthies, who took over as CEO and president in 2010. From 2006 to 2010, Matthies served as deputy finance minister.
While sometimes controversial, sales of non-potable water to potash companies are a large part of SaskWater’s business, accounting for 68 per cent of all water sales and 38 per cent of total water sales revenue.
“Potash is a very big for us,’’ Matthies said. “They’re big volume water users ... We currently serve seven of the potash mines that are in operation.’’
SaskWater supplies non-potable water to K+S’s Legacy potash solution mine near Bethune, substantially completed the 92-kilometre Zelma East pipeline to BHP Billiton’s Jansen project and worked on a water supply system for the proposed Vale solution mine at Kronau, which has been “indefinitely suspended” by the Brazilian mining company.
SaskWater is also providing services to Yancoal Resources Canada for its proposed potash solution mine near Southey, which has been opposed by environmental and landowner groups.
“Yancoal has hired us to do a preliminary study (on water supply), if their project does get regulatory and (company) approval in terms of the capital to go forward ... We’d love to be the water supplier for them, but there’s quite a ways to go yet before that decision is made.”