Just Energy Reports First Net Growth In Mass Market RCEs Since Fiscal Q1 2019

In reporting earnings for the three months ending September 30, 2021 (second quarter of fiscal year 2022), Just Energy reported net positive mass market RCE additions for the first time since the first quarter of fiscal 2019

The mass market RCE growth, "further validat[es] our strategic investment in digital marketing and rebound of face-to-face retail channels following the impacts of the COVID-19 pandemic," said Scott Gahn, Just Energy’s President and Chief Executive Officer.

Specifically, in its commodity business, Just Energy was serving 1,149,000 mass market RCEs as of September 30, 2021, versus 1,140,000 as of July 1, 2021.

The net growth of 9,000 mass market RCEs from July 1, 2021 to September 30, 2021 compares to a net loss of 6,000 mass market RCEs from April 1, 2021 to June 30, 2021. However, the April-June period was negatively impacted by the loss of 29,000 RCEs due to new product limits in New York taking effect during the period; excluding this impact, mass market RCE net adds for the three months ended June 30, 2021 were positive 23,000

During the period July 1, 2021 to September 30, 2021, gross mass market RCE additions were 86,000, with attrition of 50,000 and 27,000 RCEs which failed to renew

Just Energy total RCEs as of September 30, 2021 were 2,810,000, versus 2,836,000 as of July 1, 2021, as the company's commercial RCE count decreased by a net of 35,000 during the period

During the quarter ending September 30, 2021, Base EBITDA decreased by 6% to $30.9 million (all $ Canadian), from $32.8 million a year ago, due to lower Base Gross Margin and increased investment in digital marketing and sales agent costs, partially offset by lower administrative, selling commission and bad debt expenses.

During the quarter ending September 30, 2021, Base Gross Margin decreased by 16% to $116.6 million, from the year-ago $138.3 million, with the decrease primarily driven by a lower customer base, unfavourable exchange rate fluctuations and resettlements related to prior periods.

During the quarter ending September 30, 2021, mass market Base Gross Margin decreased by 17% to $86.6 million, compared to $104.5 million for the three months ended September 30, 2020. The decrease was driven by a decline in margin from higher energy and ancillary costs, unfavourable exchange rate fluctuations, and a decline in the customer base.

Average realized Base Gross Margin for the mass market segment for the trailing 12 months ended September 30, 2021 decreased 13% to $319, compared to $367 for the trailing 12 months ended September 30, 2020. The decrease is primarily attributable to an increase in market costs, as well as competitive market pricing and changes to the sales channel mix.

During the quarter ending September 30, 2021 gross margin on mass market RCEs added/renewed was $266/RCE, versus $309/RCE a year ago. The decrease was due to a change in channel mix, including lower cost of acquisition channels and overall margin pressure related to increasing commodity prices

The mass market attrition (trailing 12 months) was 18% during the quarter ending September 30, 2021, unchanged versus the year-ago period

The mass market average acquisition cost decreased by 2% to $235/RCE for the twelve months ended September 30, 2021 compared to $241/RCE reported for the twelve months ended September 30, 2020, primarily from lower exchange rate and a change in channel mix towards lower cost channels.

The commercial average customer acquisition cost increased by 5% to $44/RCE for the twelve months ended September 30, 2021 compared to $42/RCE for the twelve months ended September 30, 2020.

"We remain focused on our strategy as we navigate a challenging margin environment brought on by rising commodity prices across North America while we also work with the regulator and market participants on potential changes in the ERCOT market in response to the extreme weather event in Texas in February 2021," said Scott Gahn, Just Energy’s President and Chief Executive Officer.