Margin Discipline Leads To Higher Just Energy Earnings Despite Accelerated Decline In Customer Count

In reporting earnings yesterday, Just Energy disclosed that it lost a net of 134,000 Residential Customer Equivalents from March 31, 2016 to June 30, 2016, due to competitive market conditions in the mass market, and pricing discipline in the C&I market

For comparison, Just Energy had seen a net decline of 47,000 Residential Customer Equivalents from December 31, 2015 to March 31, 2016, and a net decline of 46,000 Residential Customer Equivalents from October 1, 2015 to December 31, 2015. Going further back, Just Energy had seen a net increase of 4,000 RCEs from June 30, 2015 to September 30, 2015 and a net decline of 77,000 RCEs from March 31, 2015 to June 30, 2015.

Just Energy's total customer count at June 30, 2016 was 4.386 million, versus 4.520 million as of March 31, 2016 and 4.609 million a year ago

Gross customer additions for the quarter ended June 30, 2016 were 205,000, a decrease of 32% compared to 302,000 customers added in the prior comparable quarter.

Mass market customer additions of 105,000 decreased 25% from the 140,000 added in the prior comparable quarter, primarily due to market conditions as commodity prices were lower and, therefore, more competitive across all markets.

Commercial customer additions of 100,000 decreased 38% from the 162,000 gross customer additions in the prior comparable year, primarily due to competitiveness in pricing and a more disciplined pricing strategy.

Consistent with its disciplined pricing strategy, gross margin for the quarter increased 8% year over year to $162.7 million (all $ Canadian) from $150.9 million a year ago as a result of continued margin improvement efforts and an increase from the foreign exchange related to the weaker Canadian dollar.

Quarterly Base EBITDA of $41.1 million increased 6% year-over-year primarily as a result of operational improvements.

"While sales and net customer additions declined in the first quarter, as compared to a very strong first quarter of fiscal 2016, due to our refusal to engage in risky pricing tactics that would ultimately damage our improved profitability profile, we feel strongly that our margin per customer improvement initiative will continue to deliver in fiscal 2017 and beyond," said Just Energy Co-CEO James Lewis