June 6, 2017 - 8:29 AM EDT
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Earnings Highlights and Review: Just Energy's Adjusted Earnings Soared 42%

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LONDON, UK / ACCESSWIRE / June 6, 2017 / Pro-Trader Daily publishes post-earnings coverage on Just Energy Group Inc. (NYSE: JE) following the Company's announcement of its fourth quarter and fiscal 2017 financial results on May 17, 2017. The natural gas and electricity retailer's sales number surpassed market estimates. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the three months ended March 31, 2017, Just Energy's sales decreased by 12% to $947.3 million compared to $1.08 billion recorded in Q4 FY16, reflecting the 8% decrease in customer base of its Consumer gas division and lower impact from foreign currency translation, offset by improvements in the Commercial division's customer base. The Company's revenue numbers surpassed analysts' consensus of $815 million. For FY17, Just Energy's sales decreased 8% to $3.76 billion from sales of $4.11 billion in FY17.

For Q4 FY17, Just Energy's gross margin was $175.4 million, down 14% on a y-o-y basis. The decrease was attributable to a decline in the Consumer gas division's customer base and a $9.6 million decrease from the impact of foreign currency, partially offset by gross margin improvement initiatives in the Commercial division.

Just Energy's Base EBITDA was $75.0 million for Q4 FY17, an 11% increase from $67.3 million in Q4 FY16. The Company's reported Base EBITDA for the reported quarter includes $2.1 million less prepaid commission expenses as well as a net decrease of $0.7 million resulting from the impact of foreign currency translation.

For Q4 FY17, Just Energy's Base Funds from Operations (Base FFO) was $28.6 million, down 35% compared to $43.8 million in Q4 FY16 as a result of higher income taxes from the exhaustion of non-capital loss carry forward in both Canada and the UK. The Company's earnings adjusted for non-recurring costs, totaled $0.17 per share in the reported quarter, higher than the prior year's same quarter earnings of $0.12 per share, but below Wall Street's expectations of $0.28 per share. For FY17, the Company's Base FFO of $127.8 million decreased 8% from the $138.2 million reported in the prior year.

Customer Aggregation

At the end of Q4 FY17, Just Energy's total Residential Customer Equivalent (RCE) base was 4.2 million, a 7% decrease on a y-o-y basis. The Company's net RCE additions for the reported quarter surged 47% on a y-o-y basis. The increase in net RCE additions was primarily the result of strong customer additions in the UK market. The Company's gross RCE additions in FY17 were 839,000, a decrease of 28% compared to 1,158,000 RCEs added in FY16. Just Energy's net RCE additions were a negative 318,000 for FY17, down from net additions of negative 166,000 in FY16, primarily as a result of the lower RCE additions in North America.

During Q4 FY17, Just Energy's consumer RCE additions of 455,000 decreased 13% from the 523,000 added in Q4 FY16, primarily due to market conditions as the commodity prices were lower and, therefore, more competitive across all markets as well as a decrease in RCE additions through door-to door-marketing. The Company's commercial RCE additions totaled 384,000 in the reported quarter, down from 635,000 gross RCE additions in the prior year's same quarter as a result of competitiveness in pricing and a more disciplined pricing strategy.

The combined attrition rate for Just Energy was 15% for FY17, a 1% decrease from the 16% reported in the year prior. The Company's renewal rate for FY17 was 65%, up 3% from 62% in FY16.

Cash Matters

Just Energy's cash and short-term investments were $83.6 million as of year ended March 31, 2017, a decrease of 34% from $127.6 million reported in the previous year, primarily attributable to the redemption of long-term debt during fiscal 2017.

Just Energy's long-term debt of $498.1 million as of March 31, 2017 decreased 25% from $660.5 million as of March 31, 2016. This decrease was attributed to the early redemption of the 6.0% convertible debentures with a book value of $311.0 million as at March 31, 2016, and the repayment of the remaining $80 million on the senior unsecured notes, offset by the issuance of the 6.75% convertible debentures with a book value of $145.6 million and a withdrawal of $68.3 million on the credit facility. As of March 31, 2017, Just Energy's book value net debt was 1.8x Base EBITDA, significantly improved from 2.6x one year ago.

On June 01, 2017, Just Energy announced that its board of directors declared a cash dividend for its common shares and its 8.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Shares (Series a Preferred Shares). The Company will pay a quarterly dividend of CAD $0.125 per common share on June 30, 2017 to common shareholders of record at the close of business on June 15, 2017. Just Energy will also pay a USD $0.53125 per Series A Preferred Share dividend on June 30, 2017, to Series A Preferred Shareholders of record at the close of business on June 15, 2017.

Outlook

In FY18, Just Energy is forecasting to deliver Base EBITDA in the range of $210 million to $220 million. The Company stated that while the OpEx (operational expenditure) investments in growth will present a challenge to FY18, management expects to still return to growth in base EBITDA for FY19 and beyond, returning to the double-digit percentage growth as delivered in the past.

Stock Performance

At the close of trading session on Monday, June 05, 2017, Just Energy Group's stock price slipped 1.69% to end the day at $5.24. A total volume of 165.11 thousand shares were exchanged during the session, which was above the 3-month average volume of 143.27 thousand shares. The Company's shares are trading at a PE ratio of 2.94 currently have a market cap of $777.75 million.

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Source: ACCESSWIRE (June 6, 2017 - 8:29 AM EDT)

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