Just Energy Reports Third Quarter Fiscal 2017 Results – GlobeNewswire (press release)

February 08, 2017 17:21 ET | Source: JUST ENERGY GROUP INC.

PRESS RELEASE

Just Energy Reports Third Quarter Fiscal 2017 Results

Reaffirms Fiscal 2017 Base EBITDA Guidance of $223 million to $233 million

TORONTO, ONTARIO - - February 8, 2017 - -

Just Energy Group, Inc. (TSX:JE; NYSE:JE), a leading retail energy provider specializing in electricity and natural gas commodities, energy efficiency solutions, and renewable energy options, announced results for its third quarter fiscal 2017.

Key Highlights:

1 Profit includes the impact of unrealized gains (losses), which represents the mark to market of future commodity supply acquired to cover future customer demand. The supply has been sold to customers at fixed prices, minimizing any realizable impact of mark to market gains and losses. 2 See "Non-IFRS financial measures" in unaudited interim condensed consolidated MD&A for the three and nine months ended December 31, 2016. 3 Not a meaningful figure.

"During the quarter, our gross margin per customer continued to increase and our attrition rate improved," commented Co-CEO Deb Merril. "Our gross margin per customer improvement initiative yielded desirable results once again this quarter in both our Consumer and Commercial businesses, and our attrition rate continues to improve. We believe the combination of these trends is a strong testament that our strategy to provide value to our customers is working and will support our future growth objectives. While we made significant progress along a number of important strategic, operational, and financial objectives that are enabling us to continue pursuing profitable growth, our total sales and customer addition goals were challenged during the third quarter. These challenges came as a result of lower than anticipated levels of customer switching activity due to relative price stability in gas and electricity markets, and the effect of increased competition that typically occurs in low-commodity-price environments. Fortunately, our business has delivered strong results year to date and remains healthy so that we remain well positioned to achieve our fiscal 2017 guidance while also delivering meaningful cash flow."

Co-CEO, James Lewis added, "We are coming through a very important period in our Company's recent history where we've been able to transform the profitability profile of the business while also repairing our balance sheet and overall financial position. The successful execution of these initiatives is allowing us to pivot from a period of internal repair to a period of what we believe will be prolonged growth. During the third quarter, we announced a very exciting and important entry into Germany, the largest energy market in continental Europe, through the acquisition of SWDirekt. Our future geographic expansion plans in Europe are on track, we are experiencing great customer acceptance of our growing product suite and long term loyalty programs, and our pipeline of value-additive products and opportunities for channel expansion are robust. Today, we are capable of delivering more value to customers than ever in our history and we are squarely on the path to future sustained growth."

Co-CEO, Deb Merril concluded, "We are in a very exciting period for Just Energy. We are aggressively pursuing a growth strategy centred on increasing the number of customer contracts, expanding our geographic presence, transforming our brand, enhancing our sales channels, pursuing strategic acquisitions, and providing new products and structures that meet the changing needs of today's consumers. Moving forward, we feel the successful execution of our strategy will continue to generate great interest in our offerings and result in significant net customer contract additions."

Third Quarter & YTD Operating Performance

To view the graphs associated with this release, please visit the following link: http://media3.marketwire.com/docs/1085324_graph.pdf

ANNUAL GROSS MARGIN PER RCE

Customer Aggregation

Margin per RCE improvements during the quarter demonstrated continued success of Just Energy's margin improvement initiatives. The Company remains focused on maintaining its profitable customers and ensuring that variable rate customers meet base profitability profiles, even if this results in higher attrition. This improved profitability per RCE will add to the Company's future margins over and above any growth in the customer base.

Balance Sheet & Liquidity

The Company continued to pursue aggressive debt reductions in the third quarter of fiscal 2017. As of December 31, 2016 Just Energy's book value net debt was 2.5x Base EBITDA, lower than both the 2.6x and 2.9x reported for March 31, 2016 and the prior comparable period, respectively.

Fiscal 2017 Outlook

Based on year to date performance, management believes that the Company will achieve its previously provided fiscal 2017 Base EBITDA guidance range of $223 million to $233 million, reflecting continued growth year over year. Fiscal 2017 guidance includes deductions to Base EBITDA of approximately $30.0 million to $35.0 million for prepaid commercial commissions, an increase of $12.0 million to $17.0 million over fiscal 2016, which would previously have been included as amortization within selling and marketing expenses. Just Energy expects to offset this headwind with continued strong gross margin performance.

The Company's balance sheet improvement initiatives have resulted in significantly improved debt ratios and management remains committed to further reducing and refinancing its debt in a shareholder-friendly manner. Management expects to achieve its net debt to EBITDA target ratio of 2.0x or less in the fiscal fourth quarter of 2017 and expects to maintain this relative level moving forward.

The repositioned business model has improved the Company's ability to drive profitability and cash generation, thus providing management with the confidence and freedom to commit to future dividend distributions at the current $0.50 per common share level.

Earnings Call

The Company will host a conference call and live webcast to review the third quarter results beginning at 10:00 a.m. Eastern Standard Time on Thursday, February 9, 2017, followed by a question and answer period. Rebecca MacDonald, Executive Chair, President & Co-Chief Executive Officers James Lewis and Deb Merril, and Chief Financial Officer Pat McCullough will participate on the call.

Just Energy Conference Call and Webcast

Those who wish to participate in the conference call may do so by dialing 1-888-465-5079 and entering pass code 9284222#. The call will also be webcasted live over the internet at the following link:

http://event.onlineseminarsolutions.com/wcc/r/1357734-1/5C5D979A54FB072545293279884C0606

An audio tape rebroadcast will be available starting at 12:30 p.m. EST February 9th, 2017 until March 11th, 2017 at 11:59 p.m. EST. To access the rebroadcast please dial 1-888-843-7419 and enter the participant code 9284222#.

About Just Energy Group Inc.

Established in 1997, Just Energy (NYSE:JE, TSX:JE) is a leading retail energy provider specializing in electricity and natural gas commodities, energy efficiency solutions, and renewable energy options. With offices located across the United States, Canada, the United Kingdom and Germany, Just Energy serves approximately two million residential and commercial customers providing homes and businesses with a broad range of energy solutions that deliver comfort, convenience and control. Just Energy Group Inc. is the parent company of Amigo Energy, Commerce Energy, Green Star Energy, Hudson Energy, Just Energy Solar, Tara Energy and TerraPass.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements and information. Forward-looking statements and information in this press release include, but are not limited to, the redemption of the Debentures and the timing thereof. These statements are based on current expectations that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to general economic and market conditions, levels of customer natural gas and electricity consumption, rates of customer additions and renewals, rates of customer attrition, fluctuations in natural gas and electricity prices, changes in regulatory regimes, results of litigation and decisions by regulatory authorities, competition and dependence on certain suppliers. Additional information on these and other factors that could affect Just Energy's operations, financial results or dividend levels are included in Just Energy's annual information form and other reports on file with Canadian securities regulatory authorities which can be accessed through the SEDAR website at http://www.sedar.com, on the SEC's website at http://www.sec.gov or through Just Energy's website at http://www.justenergygroup.com.

Neither the Toronto Stock Exchange nor the New York Stock Exchange has approved nor disapproved of the information contained herein.

FOR FURTHER INFORMATION PLEASE CONTACT:

Pat McCullough Chief Financial Officer Just Energy 713-933-0895 pmccullough@justenergy.com

Or

Michael Cummings Investor Relations Alpha IR Group 617-461-1101 michael.cummings@alpha-ir.com

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Just Energy Reports Third Quarter Fiscal 2017 Results - GlobeNewswire (press release)