ST. JOHN'S, NEWFOUNDLAND AND LABRADOR--(CCNMatthews - Oct. 25, 2005) - Newfoundland Power Inc. (TSX:FTS) today released its 2005 third quarter results.
Earnings for the third quarter of 2005 were $3.4 million compared to $5.0 million for the same quarter in 2004. Approximately $1.0 million of the decrease in earnings was due to timing differences associated with the basis upon which purchased power is charged to the Company under the new purchased power rate structure effective January 1, 2005. As a result, reported earnings in the first half of 2005 were higher compared to 2004, and are expected to be lower in the second half. Third quarter earnings were further reduced by $0.6 million primarily due to a 0.5% decrease in customer electricity rates effective January 1, 2005, early retirement program costs and higher finance charges. These items were partially offset by higher electricity sales and increased revenue from pole rentals.
By the end of the third quarter, the Company had invested approximately $36.3 million of its $52.0 million capital plan for 2005. "We are making significant investments across the island to upgrade and strengthen our electricity system to enhance reliability and efficiency for our customers," said Karl Smith, President and Chief Executive Officer, Newfoundland Power Inc.
During the quarter, the Company privately placed $60.0 million in First Mortgage Sinking Fund Bonds. The bonds were issued with a 30 year term at an interest rate of 5.441%. The net proceeds were used primarily to repay short-term borrowings incurred to fund capital expenditures.
Newfoundland Power has been recognized by the Canadian Electricity Association with the President's Award of Excellence for Employee Safety for 2004. The Company was named as one of the best performing companies in Canada for its commitment to employee safety. "We are proud to be honoured among the best utility companies in Canada for employee safety," said Smith. "In 2004, Newfoundland Power and its employees celebrated the best safety results since it began reporting safety performance 40 years ago. This is the first time that Newfoundland Power has received this safety award."
The Company continues to maintain a strong customer satisfaction rating, achieving 88% in the third quarter. "Our employees are committed to delivering the highest level of service," added Smith. "We are constantly improving programs and services to meet the diverse and changing needs of our customers."
In the third quarter, the Company extended its enhanced Wrap Up for Savings program for an additional two months to assist customers in preparing for the upcoming winter season. This energy efficiency program provides rebates and financing for insulation upgrades in electrically-heated homes. Customers can receive double rebates on basement insulating until November 30, 2005.
All the common shares of Newfoundland Power are owned by Fortis Inc., a diversified, international electric utility holding company with assets of approximately $4.1 billion and annual revenues of approximately $1.2 billion. The Common Shares, Series C First Preference Shares and Series E First Preference Shares of Fortis Inc. are traded on the Toronto Stock Exchange under the symbols FTS, FTS.PR.C and FTS.PR.E, respectively. Fortis Inc. information can be accessed at www.fortisinc.com.
With a customer base of over 226,000 accounts, Newfoundland Power is dedicated to providing the highest level of customer service and reliability of electricity in the most cost-efficient manner possible. For more information on Newfoundland Power's programs, services and community partnerships, please visit www.newfoundlandpower.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Newfoundland Power Inc.
Director, Corporate Communications
Cellular: (709) 682-1470