Electricity and gas provider Just Energy Group Inc. JE-T JE-N on Monday raised doubt about its ability to continue as a going concern, after it forecast a US$250-million loss from the impact of winter storms sweeping across Texas.
U.S.-listed shares of the company, which have gained nearly 23 per cent so far this year, fell 31 per cent in premarket trade as the company said the extreme weather condition would hit its liquidity.
Just Energy, which is in talks with its key stakeholders to address liquidity issues, has warned that increased demand for electricity and rolling blackouts have forced it to balance power supply at very high clearing prices.
Electricity prices in Texas soared last week as utilities scrambled for supplies to meet a surge in heating demand in the middle of the historic winter storm and prompted regulators to order a cap on prices.
An arctic air mass that spread into an area unused to such low temperature killed at least two dozen people in Texas and knocked out power to more than four million at its peak. It also hit natural gas and electric generation, cutting supplies needed to run the plants along the U.S. Gulf Coast.
Governor Greg Abbott said on Sunday that Texas utility regulators will temporarily ban power companies from billing customers or disconnecting them for non-payment, after the deadly winter storm that caused widespread blackouts.
Overall economic losses could reach US$45-billion to US$50-billion, estimated weather forecasting firm AccuWeather, nearly as much as U.S. damages suffered during the 2020 Atlantic hurricane season.
Just Energy has withdrawn its outlook for base core earnings and unlevered free cash flow for fiscal 2021.
Canada-based Just Energy, which intends to file its third-quarter results around Feb. 26, said it has imposed a blackout on trading its securities by directors and officers until then.
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