Saskatchewan's Crown corporation sector reported a substantial drop in earnings for the first half of the year, due mainly to increased electrical generating costs and a decision to cushion Saskatchewan consumers from higher home heating costs.

Details were released today by Crown Investments Corporation in its semi-annual financial report. The report covers the financial results of Saskatchewan's commercial Crown corporations and major public investments for the period January 1st to June 30th, 2001.

"The decline of about $123 million in consolidated earnings is due mainly to lower earnings at SaskPower and a loss at SaskEnergy," Crown Investments Corporation Minister Maynard Sonntag said.

"SaskPower's earnings dropped because it had much higher fuel costs and had to rely on more expensive forms of generation after low water levels resulted in reduced hydro generation. SaskEnergy lost more than $41 million, mainly because the government asked the corporation to absorb the $75.9 million deficit in the Gas Cost Variance Account. That allowed SaskEnergy to reduce its proposed rate increase and save the average residential consumer about $180 a year."

Significant results outlined in the semi-annual financial report, with all numbers comparing the first half of 2001 with the first half of 2000, include:

• Consolidated earnings were $41.9 million, down $123 million;
• Earnings for the four major commercial Crowns - SaskPower, SaskTel, SaskEnergy and SGI CANADA - declined by $128.1 million;
• The holding company, CIC, reduced its debt by $22.3 million, maintaining it at a sustainable level. The holding company's debt has declined by $414 million over the past four years, from $447.2 million to $33.2 million; and
• Two of CIC's major investments posted increased earnings. NewGrade Energy was up $22.9 million, due to higher crude oil price differentials, while earnings from Saskferco Products were up $1.4 million due to higher urea and ammonia prices.

Ted Boyle
Crown Investments Corporation
Regina
Phone: (306) 787-9039