Just Energy Reports Lower Net Customer Growth on Contract Roll-off

Just Energy recorded a slower rate of net customer growth during the three months ended September 30, 2012, versus the growth recorded in the three months ended June 30, 2012, due to the impact of a large contract which was not renewed.

As of September 30, 2012 Just Energy reported serving 4.024 million long-term Residential Customer Equivalents (RCEs), versus 3.977 million as of June 30, 2012 and 3.403 million a year ago.

The net growth of 47,000 RCEs since June 30, 2012 compares to growth of 107,000 RCEs since from April 1, 2012 to June 30, 2012 and 112,000 RCEs from December 31, 2011 to March 31, 2012.

U.S. electric RCEs as of September 30, 2012 were 2.331 million, versus 2.189 million as of June 30, 2012 and 1.548 million a year ago.

U.S. natural gas RCEs as of September 30, 2012 were 469,000, versus 544,000 as of June 30, 2012 and 570,000 a year ago. Included in the decline was the non-renewal of a 75,000 RCE customer that contributed less than $2 per RCE in gross margin, which the company did not actively pursue for renewal.

Gross customer additions during the three months ended September 30, 2012 were 344,000 RCEs. Consumer (mass market) customer additions amounted to 166,000 RCEs during the three months ended September 30, 2012, in line with the gross additions during the three months ended June 30, 2012.

In its initial months of marketing in the United Kingdom, Just Energy added 7,000 RCEs.

In the U.S., Just Energy Group's annual gas attrition for the period ending September 30, 2012 was 25%, up from the 21% experienced in the prior-year period, due to increased competition against utility pricing.

Electricity attrition in the U.S. was 13% for the rolling twelve months, a slight decrease from 14% reported in the year-ago, due to the increasing commercial customer base, which has historically experienced lower attrition rates.

The actual aggregation costs per customer for the six months ended September 30, 2012 for residential and commercial customers signed by independent representatives and commercial customers signed by brokers were as follows:

Residential customers
- U.S. Gas: $169/RCE
- U.S. Electricity: $135/RCE

Commercial customers
- U.S. Gas: $129/RCE
- U.S. Electricity: $143/RCE

Commercial broker customers
- U.S. Gas: $31/RCE
- U.S. Electricity: $32/RCE


Annual gross margin per customer added, renewed, or lost during the quarter ended September 30, 2012 was as follows (gross number of customers in parenthesis):

Residential and small commercial customers added in the quarter:
- U.S. Gas: $192 (36,000)
- U.S. Electricity: $182 (113,000)

Residential and small commercial customers renewed in the quarter:
- U.S. Gas: $182 (9,000)
- U.S. Electricity: $188 (21,000)

Residential and small commercial customers lost in the quarter:
- U.S. Gas: $157 (29,000)
- U.S. Electricity: $196 (88,000)

- Large commercial customers added in the quarter: $70 (178,000)

- Large commercial customers lost in the quarter: $50 (134,000)

Just Energy Group reported higher Adjusted EBITDA for the three months ended September 30, 2012 of $49.4 million, versus $47.9 million a year ago, on increased gross margin, partially offset by higher operating expenses (all $ in this story Canadian).

Gross margin for the quarter was $117.2 million, versus $102.6 million a year ago.

For the three months ended September 30, 2012, the Energy Marketing segment reported gross margin of $100.4 million, and Adjusted EBITDA of $38.6 million.