TransCanada has released its second quarter earnings report, posting net income of CA$324 million (CA$0.58 per share). This is compared to CA$257 million (CA$0.48 per share) for the same period in 2007, an increase of approximately 21% on a per share basis. A dividend of CA$0.36 per common share declared by the Board of Directors.
Comparable earnings were CA$316 million (CA$0.57 per share) for the second quarter of 2008, compared to CA$241 million (CA$0.45 per share) in the second quarter of 2007. The CA$75 million (CA$0.12 per share) increase was due to strong earnings from the Company’s Energy business and lower corporate costs. Higher realized power prices in Alberta were the primary reason for the significant increase in earnings in Energy’s Western Power business. Corporate costs were lower in the second quarter of 2008 due to a reduction in financial charges. Comparable earnings in the second quarter of 2008 excluded a net unrealized gain of CA$8 million from fair value adjustments in the Natural Gas Storage business and in the second quarter of 2007 excluded CA$16 million of favorable income tax adjustments.
Funds generated from operations of CA$676 million in the second quarter of 2008 were CA$80 million higher than the CA$596 million generated in the same period in 2007 primarily due to higher earnings.
The firm proceeded with plans for a 500,000 barrel per day expansion and extension of the Keystone crude oil pipeline system from western Canada to the U.S. Gulf Coast. Construction began on the initial phase of Keystone that will serve markets in the U.S. Midwest.
"The significant increase in second quarter earnings and cash flow demonstrates TransCanada's ability to deliver strong financial performance from its growing portfolio of high quality assets," said Hal Kvisle, TransCanada's president and chief executive officer. "Today we are in the midst of a CA$17 billion capital program that is expected to deliver significant value to our shareholders over the next five years. Preparing for the longer term, we continue to build and develop our portfolio of large scale energy infrastructure projects including oil and gas pipelines, power generating plants and natural gas storage facilities."
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