MONTREAL - Gaz Metro's publicly traded affiliate, Valener Inc., beat expectations as it benefited from the contribution of a Vermont acquisitions and favourable weather conditions.
The Montreal-based energy company earned $25.1 million in the second quarter, up nearly 16 per cent from $21.7 million a year earlier.
Net income in the three months ended March 31 included $24 million attributable to common shareholders after excluding non-recurring items.
That amounted to 64 cents per common share, an increase from 58 cents per share a year earlier.
The results beat analyst forecasts for 58 cents per share.
Valener's results included $7.2 million, 14 cents per share, contribution from the Central Vermont Public Service, acquired last June.
It also benefited from the favourable impact of weather on natural gas deliveries and a $2.6 million increase in Quebec distribution activities due to timing issues that are expected to reverse later in the year.
"Valener's shareholders continue to benefit from the strength of Gaz Metro's energy distribution activities in Vermont," stated Valener chairman Pierre Monahan.
Analysts were expecting five cents per share from Vermont, said Pierre Lacroix of Desjardins Capital Markets.
"While Valener's solid earnings may have a positive implication for the shares in the near term, we believe the quarterly results have a neutral impact on the story in a broader context as we will see some of the gains reversing in the coming quarters and as the outlook remains generally unchanged," he wrote in a report.
Valener's (TSX: VNR), main asset is a stake in Gaz Metro Limited Partnership, which owns Quebec's largest natural gas distributor. Gaz Metro also distributes electricity and natural gas in the state of Vermont.
Valener said it expects to maintain its dividend at 25 cents per common share for each quarter of fiscal 2013.
Excluding non-recurring items, net income attributable to the partners of Gaz Metro totalled $115.8 million for the second quarter of fiscal 2013, up from $106.6 million for the same quarter last year.
Valener resumed construction in February of the Quebec Seigneurie de Beaupre wind farm it is building with Boralex Inc. (TSX:BLX).
They are investing $750 million to install about 272 megawatts of green energy that will be operational by Dec. 1.
Another 68 MW of power will expected to come on line a year later following a $190 million investment.
On the Toronto Stock Exchange, Valener's shares gained seven cents at $16.17 in Monday morning trading.