Media Releases


1999 SEMI-ANNUAL FINANCIAL REPORT ON CROWN SECTOR RELEASED

October 18, 1999

The overall financial position of Saskatchewan's public enterprise sector remained strong in the first half of 1999, with a drop in earnings balanced by lower debt and lower interest costs on debt.

Details were released today by Crown Investments Corporation of Saskatchewan (CIC) 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 1 to June 30, 1999.

"When you balance lower earnings with a significant decrease in overall debt, the first-half performance was strong," CIC Minister John Nilson said.

"We expect that to continue for the remainder of the year, allowing CIC to declare a regular dividend of $125 million to the General Revenue Fund (GRF) on 1999 earnings. That will be $25 million more than last year, making more money available for programs and services that benefit all Saskatchewan people."

Highlights of the 1999 semi-annual financial report, with all numbers comparing the first half of 1999 with the first half of 1998 unless otherwise noted, include:

  • CIC's consolidated earnings were $172.6 million, down $113.0 million mainly due to lower gains from the sale of investments. The sale of CIC's interest in the Saskfor MacMillan Limited Partnership resulted in a gain of $30.4 million, compared to gains of $107.4 million from asset sales the year before;
  • Consolidated debt was $3.17 billion at June 30, 1999, down $278.5 million from June 30, 1998. Interest costs dropped $27.9 million in the same period;
  • During the first half of 1999, CIC provided the GRF with a regular dividend of $100 million on 1998 earnings, a special dividend of $50 million from the second instalment from the 1998 Bi-Provincial Upgrader sale, and a repayment of $42.5 million in equity advances;
  • Earnings for the four major commercial Crowns – SaskPower, SaskTel, SaskEnergy and SGI CANADA – declined by $61.0 million;
  • SaskPower's earnings were $73.7 million, down $15.1 million mainly due to higher fuel, purchased power and operating costs. Long-term debt dropped by $26.7 million since June 30, 1998, with associated interest costs dropping $3.2 million during the same period;
  • SaskTel's earnings of $39.9 million were down $26.6 million mainly due to lower long distance revenues, but offset somewhat by strong growth in the data business and entry into new lines of business. First half earnings in 1998 had also included a gain of $7.6 million from the sale of SaskTel's interest in Alouette Telecommunications Inc.;
  • SaskEnergy's earnings of $30.1 million were $0.8 million lower. Operationally, the first six months of 1999 were the same as 1998, therefore the financial results are very similar.
  • SGI CANADA's earnings were reduced by $18.6 million to $10.0 million largely as a result of higher claims costs and lower investment income;
  • The Saskatchewan Auto Fund reduced its deficit by $20.2 million in the first six months to $71.4 million at June 30;
  • Saskatchewan Transportation Company (STC) had a net loss of $2.0 million compared with $2.1 million in the first half of 1998, largely due to cost reductions, partly offset by decreased revenues; and
  • Sask Water had a net loss of $3.0 million compared with a loss of $0.8 million in the first half of 1998, due mainly to losses in SPUDCO operations and the bankruptcy of Lake Diefenbaker Potato Corporation LDPC).

 

-30-

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