Canadian Propane Distribution
Canadian propane distribution gross profit for the fourth quarter was $68.1 million, an increase of $5.8 million or 9% from 2011, due to higher sales volumes and gross margins. Residential and commercial sales volumes increased by 9 million litres or 8% from the prior year quarter, due to colder weather during the fourth quarter of 2012 as compared to the prior year quarter. Average weather across Canada for the fourth quarter, as measured by degree days, was 11% colder than the prior year and 4% colder than the five-year average. Industrial volumes increased by 6 million litres or 3%, due to increased wholesale sales volumes as a result of sales efforts to grow this segment. Automotive propane volumes increased by 1 million litres or 6%, this increase is in contrast to the historical structural decline in this end-use market due to the favourable price spread between propane and gasoline.
Average propane sales margins for the fourth quarter increased to 17.8 cents per litre from 16.9 cents per litre in the prior year quarter. The increase is principally due to the implementation of price increases to industrial and commercial sales contracts during the first quarter of 2012 and improved pricing management offset in part by unfavourable movement in the sales mix as the current quarter included a higher proportion of lower-margin sales volumes.
Canadian Propane Distribution Sales Volumes
Volumes by End-Use Application Volumes by Region(1)---------------------------------------------------------------------------- Three months ended December 31, Three months ended December 31,(millions of 2012 2011 (millions of 2012 2011litres) litres)----------------------------------------------------------------------------Residential 42 40 Western 228 218 CanadaCommercial 79 72 Eastern 129 123 CanadaAgricultural 30 31 Atlantic 26 27 CanadaIndustrial 215 209Automotive 17 16---------------------------------------------------------------------------- 383 368 383 368--------------------------------------------------------------------------------------------------------------------------------------------------------Volumes by End-Use Application(1) Volumes by Region(2)----------------------------------------------------------------------------Twelve months ended December 31, Twelve months ended December 31,(millions of 2012 2011 (millions of 2012 2011litres) litres)----------------------------------------------------------------------------Residential 121 128 Western 751 738 CanadaCommercial 255 262 Eastern 440 460 CanadaAgricultural 60 67 Atlantic 101 107 CanadaIndustrial 781 769Automotive 75 79---------------------------------------------------------------------------- 1,292 1,305 1,292 1,305--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Regions: Western Canada region consists of British Columbia, Alberta, Saskatchewan, Manitoba, Northwest Ontario, Yukon and Northwest Territories; Eastern Canada region consists of Ontario (except for Northwest Ontario) and Quebec; and Atlantic Canada region consists of New Brunswick, Newfoundland & Labrador, Nova Scotia and Prince Edward Island.
