AltaGas Income Trusts net income slides in third quarter as revenues decline

By The Canadian Press

CALGARY - AltaGas Income Trust (TSX: ALA-UN.TO) said it saw a decline in net income for its third quarter but posted solid results overall.

The natural gas and power company reported net income of $34.7 million or 44 cents per unit for the third quarter. This was down from a year-ago profit of $53.5 million or 75 cents per unit, but ahead of analyst estimates.

However, the company pointed out that last year's net income had been boosted by a one-time tax recovery of $13.8 million as a result of legal entity ownership changes within the trust. Excluding this, AltaGas said last year's third-quarter net income stood at $39.7 million or 56 cents per unit.

Quarterly revenues totalled $291.4 million, down from $460.7 million last year.

Four analyst estimates compiled by Thomson Reuters had projected earnings per unit of 35 cents.

"Our third quarter earnings reflect AltaGas' stable operations, diversified gas and power assets and disciplined risk management," said David Cornhill, AltaGas' chairman and chief executive officer.

"While parts of our business faced current market challenges, overall our energy infrastructure business reported solid results."

Cornhill added that the company expects 2009 to be a year of strong earnings as growth projects contribute to earnings.

"We remain committed to delivering strong returns to investors and to growing our gas and power business," he said.

Cornhill said the company was pursuing about $2 billion in real growth projects over the next five to seven years which include renewable energy developments and natural gas businesses.

AltaGas said its power business reported lower results mainly due to lower spot power prices and higher power purchase agreement costs, but benefited from strong hedge prices and lower transmission and environmental compliance costs.

The trust said its transmission business reported increased revenue from an upgrade to a delivery system pipeline and adjustment for revenues previously deferred.

The trust also said it saw increased earnings in its Energy Services segment due to an adjustment of liabilities related to natural gas transactions.

These were however offset by a reduction in Field Gathering and Processing volumes due to producers shutting-in gas production and volume declines.

The trusts units closed at $18.19 Wednesday on the Toronto Stock Exchange.