Utility firm Just Energy cuts 200 positions, predicts $9M in severance costs

TORONTO – Just Energy Group Inc. says it is eliminating 200 jobs in a move that will save $40 million in annual costs in its upcoming financial year.

The company, which sells electricity and natural gas and provides other services to consumers in Canada, the United Kingdom and the United States, says it will incur about $9 million in severance costs in the fourth quarter of its 2019 financial year, which ends March 31.

In a regulatory filing in May last year, Just Energy reported employing a total of 1,576 people.

The company left in place its guidance for its 2019 financial year’s base earnings before interest, taxation, depreciation and amortization of between $200 million and $220 million.

In a report, CIBC World Markets analysts say the cost savings were likely overdue and shouldn’t impact operations, adding they view the enterprise as a “show-me story” with above average investment risk.

Just Energy lost $35.8 million on sales of $2.8 billion in the nine months ended Dec. 31, compared with a profit of $252 million on $2.6 billion in the same period of 2017.

“Today we took actions that align with our ongoing commitment to transform our organization to a consumer company,” said CEO Patrick McCullough in a news release after markets closed Thursday.

“These actions will serve to secure a bright future and support the best interests of all of our valued stakeholders.”

Companies in this story: (TSX:JE)