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FLASH: Just Energy Sees Return to Net Customer Growth in Mass Market Accounts
Just Energy saw net growth of 17,000 mass market energy supply residential customer equivalents (RCEs) from September 30, 2013 to December 31, 2013, reversing a net loss recorded from June 30, 2013 to September 30, 2013.
In reporting earnings for the quarter ended December 31, 2013, Just Energy said that is was serving 1.994 million energy mass market RCEs as of December 31, 2013, versus 1.977 million as of September 30, 2013 and 1.990 million a year ago.
The net growth of 17,000 mass market energy RCEs from September 30, 2013 to December 31, 2013 compares to a net decline of 15,000 mass market energy RCEs from June 30, 2013 to September 30, 2013. The net mass market growth came on gross mass market additions of 165,000 RCEs, partially offset by attrition of 118,000 RCEs and 30,000 RCEs which failed to renew.
For Just Energy's commercial energy supply division, RCEs grew to 2.366 million as of December 31, 2013, versus 2.345 million as of September 30, 2013 and 2.134 million a year ago.
Total Just Energy energy marketing RCEs were 4.360 million as of December 31, 2013, versus 4.322 million as of September 30, 2013 and 4.124 million a year ago.
Just Energy was also serving 287,000 home services RCEs as of December 31, 2013, including 23,000 smart thermostat RCEs. Of the smart-thermostat installations as of December 31, 2013, 61% were bundled with energy or furnace contracts and the remaining 39% were sold as stand-alone units.
Just Energy said that it, "has made a conscious effort to maintain new customer margins at the expense of signing high volume/low margin customers that would otherwise be available."
Traditional door-to-door marketing accounted for 26% of customer additions during the three months ended December 31, 2013, while non-door-to-door channels contributed the remaining 74% (Commercial brokers - 50%; Internet, Network and Telemarketing – 24%). Prior to fiscal 2011, the vast majority of new customers were signed through door-to-door sales.
The attrition rate was 14% on a trailing 12-month basis, up from 13% in the prior-year period, with the consumer markets higher and commercial markets lower. Overall attrition remains at target levels, the company said.
Just Energy reported base EBITDA from continuing operations $72.2 million, for the quarter, up from $55.2 million a year ago (Canadian $).
Gross margin from the mass market energy supply division increased by 23% as a result of an increase in margin earned on variable term products, as well as increased gas consumption resulting from colder temperatures during the quarter versus the previous comparable quarter.
Just Energy did flag that the Commercial Energy division's gross margin declined 8% despite an 11% increase in customers. "Competition remained strong for commercial customers in the United States and, as was seen in the first two quarters of the year, lower margins were required to win competitive bids. Further, unforeseen capacity costs in the Northeast U.S. reduced realized margins. Overall, the Commercial Energy division remains profitable as the lower cost to serve a larger customer offsets the lower gross margin per RCE," the company said
Just Energy is holding an earnings call this morning.
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February 14, 2014
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Reporting by Karen Abbott • kabbott@energychoicematters.com
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