Energy Savings Income Fund
TSX : SIF.UN

Energy Savings Income Fund

May 18, 2006 09:48 ET

Energy Savings Sets Fiscal 2007 Customer Aggregation Targets 475,000 Additions; Expected Net Customer Growth of 20%

TORONTO, ONTARIO--(CCNMatthews - May 18, 2006) - Brennan Mulcahy, CEO of Energy Savings (TSX:SIF.UN), announced the Fund's 2007 new customer aggregation targets. As a fast growing marketing company, the ability to add new customers is essential to Energy Savings' continued success. The Fund operates in Ontario (gas and electricity), as well as Other Provinces (Quebec, British Columbia, Manitoba and Alberta) and the United States (Illinois and New York).

In every year since the Energy Savings' IPO, management has published customer aggregation targets for the upcoming fiscal year. Targets are set for each market. Each year, actual customers added has exceeded the published target. In fiscal 2006, Energy Savings added 424,000 new customers through marketing, 21% more than our published target and 46% more than the prior year's record total. The following are our fiscal 2007 targets:



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Market 2007 Target 2006 Actual % Increase
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Ontario - Gas 50,000 55,000
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Other Provinces - Gas 60,000 83,000
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United States - Gas 100,000 72,000
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Canada - Electricity 175,000 186,000
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United States - Electricity 90,000 28,000
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Total 475,000 424,000 12%
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Net additions through marketing are targeted at 307,000 versus actual net additions of 281,000 in fiscal 2006. Including these additions, total expected customer growth in fiscal 2007 is as follows:



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Beginning Gross Attrition and Ending
Customers Additions Non-Renewal Customers
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1,502,000 475,000 (168,000) 1,809,000
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Based on the Fund's published 2007 targets, net additions would equate an increase of 20% over the existing book. This would be the highest level of customer additions in the Fund's history, excluding acquisitions.

CEO Brennan Mulcahy stated: "Coming off a great year in fiscal 2006, our team of agents has never been stronger. Our U.S. markets were very receptive to our five year fixed price product and we expect Illinois and New York to be key drivers of our growth in fiscal 2007. Setting expectations for yet another year of record additions is not taken lightly by our management team. We do so in full expectation of meeting or exceeding our target as we have every year since our IPO."

"As in the past, growing our customer base will result in higher distributable cash. We are optimistic that if we reach our target additions, distributable cash both after customer replacement and after net customer additions, will increase in the range of 15% to 20% for the year. There are very few income funds (in fact, very few companies period) that can generate this growth year after year. We at Energy Savings are very proud of our consistency in delivering growth to our Unitholders."

The Fund

Energy Savings' business, which is conducted in Ontario, Manitoba, Alberta, Quebec, British Columbia, Illinois, and New York, involves the sale of natural gas to residential, small to mid-size commercial and small industrial customers under long term, irrevocable fixed price contracts. Energy Savings also supplies electricity to Ontario, Alberta and New York customers. By fixing the price of natural gas or electricity under its fixed price contracts for a period of up to five years, Energy Savings' customers offset their exposure to changes in the price of these essential commodities. Energy Savings, which commenced business in July of 1997, derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the matching volumes from its suppliers.

Forward-Looking Statements

The Fund's press releases may contain forward-looking statements including statements pertaining to customer revenues and margins, customer additions and renewals, customer consumption levels, distributable cash and treatment under governmental regulatory regimes. These statements are based on current expectations that involve a number of risks and uncertainties which could cause actual results to differ from those anticipated. These risks include, but are not limited to, levels of customer natural gas and electricity consumption, rates of customer additions and renewals, fluctuations in natural gas and electricity prices, changes in regulatory regimes and decisions by regulatory authorities, competition and dependence on certain suppliers. Additional information on these and other factors that could affect the Fund's operations, financial results or distribution levels are included in the Fund's annual information form and other reports on file with Canadian securities regulatory authorities which can be accessed through the SEDAR website at www.sedar.com or through the Fund's website at www.esif.ca.

The Toronto Stock Exchange has neither approved nor disapproved of the contents of this release.

Contact Information

  • Energy Savings Income Fund
    Ms. Rebecca MacDonald
    Executive Chair
    (416) 367-2872
    or
    Energy Savings Income Fund
    Mr. Brennan Mulcahy
    Chief Executive Officer
    (905) 795-4200
    or
    Energy Savings Income Fund
    Ms. Mary Meffe C.A.
    Chief Financial Officer
    (905) 795-4206