Emera Inc - Second Quarter Earnings of $15.6 Million

TORONTO, ON - -- Emera Inc.'s consolidated earnings were $15.6 million in the second quarter of 2001, compared to $19.9 million for the same period in 2000. Total revenues for the quarter increased 4.9%, to $217.6 million. Higher world prices for fossil fuels used in electricity generation, and increased customer service and business development activities were the primary reasons for the earnings decrease.

"We're managing through a period of high fuel costs, but as we expected the earnings impact in the second quarter was less than in Q1", said David Mann, President and Chief Executive Officer of Emera Inc. Earnings per share were $0.15 for the second quarter (including the $0.02 dilutive impact of the common equity issue in the first quarter), compared to $0.23 for the same period in 2000.

"Our Nova Scotia Power subsidiary is on track to meet its earnings budget for the year, despite high fuel prices," said Ron Smith, Chief Financial Officer of Emera Inc. "In the third quarter, we expect to see both Bangor Hydro and our Sable offshore investment start to contribute to earnings."

Electric revenues increased 3.3%, to $196.6 million in the second quarter of 2001, compared to $190.4 million for the same period in 2000. Residential sales volumes stayed strong, increasing 6.2%, reflecting a return to normal temperatures after several warmer years. A $2.9 million increase in export sales offset the impact of reduced activity at a small number of industrial customers.

Fuel for generation and power purchased increased 14% to $69.9 million for the second quarter of 2001 compared to $61.3 million in 2000. $2.3 million of the increase results from higher sales volumes; the majority is due to continued higher prices for coal, petroleum coke and oil. These cost increases were partially offset by increased hydro production, made possible by a late spring thaw.

"Nova Scotia Power continues to invest in customer initiatives that are quite innovative for an electric utility," said Mr. Mann. "We're implementing a customer research and segmentation program, developing pricing options, and putting together a Green Power offering. In addition, Emera is stepping up its business development activity, particularly with respect to gas infrastructure opportunities, because we see great potential for growth arising from the development of Nova Scotia's offshore natural gas."

These activities, along with growth in Emera Fuels, which acquired four new fuel companies at the end of 2000, and increased maintenance in generation contributed to the increase in operating, maintenance and general expenses, which were $48.3 million for the second quarter of 2001, compared to $43.5 million in 2000.

In June, 2001, Emera acquired an 8.4% interest in the Sable Offshore Energy Project (SOEP) offshore platforms and associated sub-sea field gathering lines for $50.0 million. "Our SOEP acquisition is an important step in implementing our gas infrastructure strategy", said Mr. Mann. "It complements our Maritimes & Northeast Pipeline investment, and puts us in partnership with the industry leaders driving the development of Nova Scotia's offshore natural gas reserves. We believe this will lead us to additional opportunities going forward."