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Just Energy Mass Market Net Churn Slows, But Continues, Offset by Accelerated C&I Growth
Just Energy saw its mass market customer base decline for a second consecutive quarter, but the marginal decrease was more than offset by accelerated growth in its commercial customer base
Specifically, Just Energy was serving 1.942 million mass market energy supply RCEs as of June 30, 2014, versus 1.945 million as of March 31, 2014. The net loss of 3,000 mass market supply customers narrows the net loss of 15,000 customers from December 31, 2013 to March 31, 2014.
The net loss of 3,000 mass market supply customers came on gross additions of 165,000 mass market customers during the quarter.
Included in the mass market supply customer base are 30,000 smart-thermostat customers. The smart thermostats are bundled with a commodity contract and are currently offered in Texas and Ontario.
Just Energy's commercial energy supply RCEs were 2.595 million as of June 30, 2014, versus 2.465 million as of March 31, 2014. This gain of 130,000 commercial supply RCEs is double the gain of 65,000 commercial supply RCEs from December 31, 2013 to March 31, 2014.
Total Just Energy supply RCEs were 4.537 million as of June 30, 2014, versus 4.410 million as of March 31, 2014
For the three months ended June 30, 2014, 19% of total mass market and commercial energy marketing customer gross additions were generated from door-to-door sales, 58% from commercial brokers and 22% through Internet-based and other non-door-to-door channels. In the prior comparable period, 38% of new customers were generated using door-to-door sales channels.
The trailing 12-month attrition rate as of June 30, 2014 was 28% for Just Energy's mass market supply business, and 6% for its commercial supply business.
Average realized gross margin for the mass market energy supply division after all balancing costs for the rolling 12 months ended June 30, 2014 was $174/RCE representing an increase from $165/RCE reported in the prior comparable quarter (all $ Canadian).
For the three months ended June 30, 2014, the average gross margin per RCE for the customers added and renewed by the mass market energy supply division was $184/RCE, an increase from $170/RCE in the prior comparable quarter. The average gross margin per RCE for the mass market supply customers lost during the first quarter of fiscal 2015 was $178/RCE. Higher new customer margins reflect increased renewable energy product sales and strong margins on flat-bill related products.
The average aggregation cost for new mass market electric customers during the quarter ending June 30, 2014 was $139/RCE
Average realized gross margin for the commercial energy supply division after all balancing costs for the rolling 12 months ended June 30, 2014 was $58/RCE, a decrease from $76/RCE, due largely to the impact to gross margin from higher capacity costs for electricity customers
Just Energy Base EBITDA from continuing operations was $30.2 million, up from $20.7 million in the prior comparable period. The gain was driven by higher total customer count, and higher margins on the mass market customer book despite net customer attrition.
The company reiterated that, "Just Energy retains a strong interest in participating in the sale of solar energy to residential homeowners. Just Energy contracted residential JustGreen sales to more than 185,000 homes in fiscal 2014 with effectively all customers paying a premium price for 'green' supply. Solar installations are advertised as immediately reducing energy costs in most markets. Such a product offering would be well suited for sale through the Just Energy sales force. Residential solar sales at a fraction of current JustGreen levels would place Just Energy in a leading market position in this segment. The Company is exploring methods of offering residential solar without the incurrence of material new debt."
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August 8, 2014
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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com
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