Most utilities book YOY slides in recurring EBITDA margin in Q1

The majority of the 25 most profitable Canadian and U.S. utilities recorded a negative year-over-year change in recurring EBITDA margin in the first quarter of 2022, according to S&P Global Market Intelligence data.

Algonquin Power & Utilities Corp. posted the largest decline at 18.8 percentage points. It had a recurring EBITDA margin of 35.9% of recurring revenues for the first three months of 2022.

The Oakville, Ontario-headquartered diversified utility wrapped its acquisition of New York American Water Co. in January and is working on completing its purchase of American Electric Power Co. Inc.'s Kentucky assets.

The company is planning to spend $4.3 billion this year related to the two transactions, and management is still seeing opportunities for strategic growth.

National Fuel Gas Co. remained the most profitable utility by recurring EBITDA margin, despite seeing a negative 0.2 percentage point change year over year.

The gas utility had a recurring EBITDA margin of 54.5% of recurring revenues in the first quarter of 2022, compared with 54.7% in the same period in 2021.

In a recent interview with S&P Global Commodity Insights, National Fuel President and CEO David Bauer discussed the company's appetite for deal-making, the future of its New York distribution business and the strategy for renewable natural gas.

Eight utilities saw a positive year-over-year change in recurring EBITDA margin in the first quarter.

OGE Energy Corp. logged the largest increase at 10.4 percentage points. The utility, which plans to exit its Energy Transfer LP investment by the end of 2022, had a recurring EBITDA margin of 40.3% of recurring revenues.

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