August 31, 1998
Deputy Premier and Crown Investments Corporation (CIC) Minister Dwain Lingenfelter said today the mid-year financial report for Saskatchewan's commercial Crown corporations indicates 1998 will be another strong year for the Crown sector.
"The results for the first half are very encouraging and have established a solid foundation for the remainder of the year," Lingenfelter said.
The report covers the financial results of Saskatchewan's commercial Crown corporations and major investments for the period January 1 to June 30, 1998.
"Consolidated debt has dropped by $186 million since June 30, 1997," Lingenfelter said. "This continued commitment to aggressive debt reduction is helping us pay down the mortgage on our future and making more money available for things like health care, highways and education."
Lower debt has resulted in a saving of $15 million on interest expense during the first half of 1998, compared to the first half of 1997. Debt reduction in recent years has significantly improved the financial position of CIC and its subsidiary Crowns and as a result, CIC expects to declare a regular dividend of $100 million to the General Revenue Fund (GRF) on 1998 earnings, which is double the amount paid on 1997 earnings.
Other highlights of the 1998 semi-annual financial report, with all numbers comparing the first half of 1998 with the first half of 1997 unless otherwise noted, include:
CIC's consolidated net earnings increased by $45 million, due mainly to higher gains on asset sales, in particular CIC's 50 per cent interest in the Bi-Provincial Upgrader Joint Venture;
Earnings for the four major commercial Crowns were up a total of $19 million;
The first instalment on the sale of Bi-Provincial allowed CIC to pay a special dividend of $50 million to the GRF in the first half of 1998 and to repay $42.5 million in equity advances;
SaskPower's net income was $81.4 million, declining $3.6 million mainly due to higher costs for fuel and purchased power. Since June 30, 1997, the corporation has reduced its long-term debt by $104.1 million, contributing significantly to overall debt reduction in the Crown sector;
SaskTel's net income increased $14.3 million to $66.5 million, due mainly to the $7.6 million realized from the sale of the corporation's interest in Alouette Telecommunications Inc., growth in diversified operations and improved earnings in the core telephony business. Overall revenues were up $13.5 million, while long distance revenues were down by $3.3 million;
SaskEnergy's net income declined $2.8 million to $30.9 million, mainly due to warmer weather resulting in a lower volume of natural gas being distributed;
SGI CANADA's net income increased $10.7 million to $28.6 million, due mainly to increased earnings from underwriting and investments;
The Saskatchewan Auto Fund, the compulsory provincial vehicle insurance program administered by SGI, reduced its deficit by $29.9 million in the first six months of 1998. The deficit stood at $97.9 million at June 30;
Saskatchewan Transportation Company (STC) recorded a loss of $2.1 million compared with $3.6 million in the first half of 1997, due mainly to significant cost reductions. Revenues decreased by $1.2 million due to a number of factors, including reduced ridership.
Copies of the Semi-Annual Financial Report for 1998 are available from Crown Investments Corporation of Saskatchewan, 400 - 2400 College Avenue, Regina, S4P 1C8. Phone: (306)787-6851. The report is also available on the Internet at: www.www.cicorp.sk.ca
Crown Investments Corporation
Phone: (306) 787-5889