Just Energy Records Third Consecutive Quarter Of Net Mass Market Growth; Also First Mass Growth On Annual Basis Since FY 2018 -- EnergyChoiceMatters.com

Just Energy Records Third Consecutive Quarter Of Net Mass Market Growth; Also First Mass Growth On Annual Basis Since FY 2018

August 8, 2022

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Just Energy reported fiscal results for the quarter ending March 31, 2022 (fourth fiscal quarter) as well as the fiscal year ending March 31, 2022

In its commodity business, Just Energy had 2,755,000 RCEs as of March 31, 2022, versus 2,761,000 RCEs as of December 31, 2021, and 2,936,000 a year ago

At March 31, 2022, in the commodity business, Just Energy had 1,201,000 Mass Markets RCEs, versus 1,173,000 Mass Markets RCEs as of December 31, 2021, and 1,147,000 Mass Markets RCEs a year ago

The approximately 27,000 RCE net growth in commodity Mass Markets RCEs from December 31, 2021 to March 31, 2022, compares to net growth of 24,000 mass market RCEs from October 1, 2021 to December 31, 2021, net growth of 9,000 mass market RCEs from July 1, 2021 to September 30, 2021, a net loss of 6,000 mass market RCEs from April 1, 2021 to June 30, 2021, and a net loss of 40,000 mass market RCEs for the prior comparable quarter. The year-over-year change was driven by higher gross additions during the quarter ending March 31, 2022

For the commodity business, Mass Markets RCE Net Adds for the year ended March 31, 2022 was a net gain of 54,000 compared to a loss of 176,000 for the year ended March 31, 2021, driven by an increase in customer additions and lower attrition and Failed to Renew.

Just Energy said that it delivered annual net positive Mass Markets RCE additions for the first time since fiscal 2018. Just Energy noted an increase in the Texas mass market customer base

Commodity Mass Markets RCE gross additions for the commodity business increased by 109% to 347,000 for the year ended March 31, 2022 compared to 166,000 for the year ended March 31, 2021. The increase was driven by investment in digital marketing, as well as continued improvement in direct face-to-face channels. The COVID-19 pandemic had substantial impacts in the year ended March 31, 2021.

Commodity Mass Markets RCE gross attrition decreased by 12% to 202,000 for the year ended March 31, 2022, compared to 230,000 for the year ended March 31, 2021.

Commodity Mass Markets Failed to Renew RCEs decreased by 19% to 91,000 for the year ended March 31, 2022, compared to 112,000 for the year ended March 31, 2021.

At March 31, 2022, U.S. operations accounted for 88% of the Mass Markets RCE base

At March 31, 2022, in the commodity business, Just Energy had 1,554,000 Commercial RCEs, versus 1,588,000 as of December 31, 2021 and 1,789,000 a year ago.

Commodity Commercial RCE gross additions decreased by 23% to 149,000 for the year ended March 31, 2022, compared to 194,000 for the year ended March 31, 2021.

"Although our fiscal year 2022 financial results were impacted by the highly competitive retail landscape and extraordinarily high commodity prices, the Company delivered annual net positive Mass Markets RCE additions for the first time since fiscal 2018, continuing to validate our strategic investment in digital marketing and face-to-face channels, and further strengthened by our higher Mass Markets renewal rates," said Scott Gahn, Just Energy’s President and Chief Executive Officer.

For the quarter ending March 31, 2022, Just Energy Base EBITDA decreased by 70% to $12.9 million (all dollars USD) for the three months ended March 31, 2022 compared to $43.4 million for the three months ended March 31, 2021. The decrease was primarily driven by lower Base Gross Margin and higher administrative expenses, investment in digital marketing and sales agent costs, and provision for expected credit loss, partially offset by lower selling commission expenses

Selling commission expenses decreased by 13% to $19.4 million for the three months ended March 31, 2022, compared to $22.3 million for the three months ended March 31, 2021. The decrease was primarily due to lower direct in-person and commercial sales in prior periods.

Selling non-commission and marketing expenses increased by 21% to $13.5 million for the three months ended March 31, 2022, compared to $11.1 million for the three months ended March 31, 2021 The increase was driven by investment in digital marketing and sales agent costs to drive customer additions and retention.

Provision for expected credit loss increased by 42% to $8.2 million for the three months ended March 31, 2022, compared to $5.8 million for the three months ended March 31, 2021. The increase in provision for expected credit loss was driven from the higher revenues in Texas Mass Market from an increase in customer base and release of credit reserves in the prior year for Mass Markets, partially offset by the release of credit reserves for Commercial in the current period.

Just Energy Base gross margin, which excludes the financial impact to the company of the February 2021 Weather Event, decreased by 22% to $81.3 million for the three months ended March 31, 2022, compared to $103.6 million for the three months ended March 31, 2021. The decrease in Base gross margin was primarily driven by higher supply costs.

Revenue increased by 7% to $582.7 million for the three months ended March 31, 2022 compared to $544.0 million for the three months ended March 31, 2021. The increase was primarily driven by an increase in the Texas mass market customer base and higher commercial revenue in Canada.

For the year ended March 31, 2022, the commodity business mass markets average gross margin per RCE for the customers added or renewed was $250, a decrease of 5% from $261 for the year ended March 31, 2021 due to higher supply costs and competitive pricing to support customer growth and retention.

For the year ended March 31, 2022 the commodity business commercial average gross margin per RCE for the customers added or renewed was $81, an increase of 31% versus the $62 for the year ended March 31, 2021.

Mass Markets average realized Base Gross Margin for the trailing 12 months ended decreased 18% to $219 per RCE compared to $268 for the trailing 12 months ended March 31, 2021. The decrease is primarily attributable to higher supply costs.

Commercial average realized Base Gross Margin for the trailing 12 months ended increased 3% to $75 per RCE compared to $73 for the trailing 12 months ended March 31, 2021. The increase is primarily driven by higher average realized Base Gross Margin in the electricity markets.

The mass markets average acquisition cost decreased by 8% to $180/RCE for the trailing twelve months ended March 31, 2022, compared to $195/RCE reported for the twelve months ended March 31, 2021, due to a change in channel mix towards lower cost channels.

The commercial average customer acquisition cost increased by 20% to $36/RCE for the trailing twelve months ended March 31, 2022, compared to $30/RCE for the twelve months ended March 31, 2021.

The commodity business mass markets attrition rate for the three months ended March 31, 202 was 4%, flat versus the year-ago period. The commodity business commercial attrition rate for the three months ended March 31, 2022 was 2%, flat versus the year-ago period

Just Energy reported that, of all mass market customers who contracted with Just Energy in the past year, 40% purchased JustGreen for some or all of their energy needs. On average, these customers elected to purchase 93% of their consumption as green supply. For comparison, as reported for the trailing 12 months ended March 31, 2021, 37% of Mass Market customers who contracted with Just Energy chose to include JustGreen for an average of 98% of their consumption. As at March 31, 2022, JustGreen makes up 24% of the Mass Market electricity portfolio, compared to 25% in the year ago period. JustGreen makes up 24% of the Mass Market gas portfolio, compared to 17% in the year ago period.

Just Energy ended the year (FY ending March 31, 2022) with $125.7 million of total liquidity, comprised of cash and cash equivalents.

Just Energy reported that it received $147.5 million in June 2022 under the ERCOT securitization program

As previously reported, Just Energy has entered into a Stalking Horse Transaction Agreement with the lenders under the Company’s debtor-in-possession financing facility, one of their affiliates and the holder of certain assigned secured claims. Specifically, these entities are: LVS III SPE XV LP; TOCU XVII LLC; HVS XVI LLC; OC II LVS XIV LP; OC III LFE I LP; and CBHT Energy I LLC

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