Canadian Propane Distribution
Canadian propane distribution gross profit for the first quarter was $77.1 million, an increase of $4.3 million or 6% from 2012, due to higher sales volumes and gross margins. Residential and commercial sales volumes increased by 15 million litres or 10% from the prior year quarter, due to colder weather during the first quarter of 2013 as compared to the prior year quarter and both new residential sales and improved customer retention. Average weather across Canada for the first quarter, as measured by degree days, was 7% colder than the prior year and consistent with the five-year average. Industrial volumes were consistent with the prior year quarter and automotive propane volumes increased by 1 million litres or 7%, this increase is in contrast to the historical structural decline in this end-use market due to the continued favourable price spread between propane and gasoline.
Average propane sales margins for the first quarter increased to 18.0 cents per litre from 17.6 cents per litre in the prior year quarter. The increase is principally due to improved pricing management and a favourable movement in the sales mix as the current quarter included a higher proportion of higher-margin sales volumes.
Canadian Propane Distribution Sales Volumes
Volumes by End-Use Application Volumes by Region(1)------------------------------------- ------------------------------------- Three months ended March 31, Three months ended March 31,(millions of litres) 2013 2012 (millions of litres) 2013 2012------------------------------------- -------------------------------------Residential 52 47 Western Canada 255 243Commercial 107 97 Eastern Canada 144 137Agricultural 17 16 Atlantic Canada 30 33Industrial 238 239Automotive 15 14------------------------------------- ------------------------------------- 429 413 429 413------------------------------------- -------------------------------------------------------------------------- -------------------------------------(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.
U.S. Refined Fuels Distribution
U.S. refined fuels distribution gross profit for the first quarter was $52.9 million, an increase of $7.2 million from the prior year quarter. The increase in gross profit was due to higher sales volumes and gross margins. Sales volumes of 512 million litres, increased by 39 million litres or 8% from the prior year quarter. The increase was primarily due to colder weather as the prior year quarter experienced unseasonably warm weather offset in part by higher customer attrition. Weather as measured by heating degree days for the first quarter was 23% higher than the prior year quarter although customer attrition negatively impacted overall heating related sales volumes. Average U.S. refined fuels sales margins of 10.3 cents per litre increased slightly from 9.7 cents per litre in the prior year quarter. Sales margins were positively impacted by reduced cost for propane supply and a favourable sales mix due to a higher proportion of higher-margin sales volumes.
