Divesting SaskEnergy Can Increase Its Profitability
WINNIPEG, MB, March 18, 2021 – The Frontier Centre for Public Policy has just released Abundant Natural Gas, Ample Opportunity: A Valuation & Strategic Appraisal of SaskEnergy by Ian Madsen, a senior policy analyst with the Frontier Centre. This paper conducts an in-depth valuation and strategic appraisal of SaskEnergy, using an intrinsic value method and market-based valuation system.
SaskEnergy is the Crown gas utility owned by the provincial government of Saskatechwan. The company serves 93 percent of communities in the province. SaskEnergy has negative free cash flow and positive operating and profit-based returns on assets, equity and capital employed. This valuation explores the different options in which SaskEnergy could increase its profitability, overall benefiting the citizens of Saskatchewan. Private sector companies tend to perform better than those owned by the government. Government ownership of a company exposes citizens and taxpayers to the unnecessary risks of economic and technological trends.
The Frontier Centre for Public Policy is an independent, non-profit organization that undertakes research and education in support of economic growth and social outcomes that will enhance the quality of life in our communities. Through a variety of publications and public forums, the Centre explores policy innovations required to make the prairies region a winner in the open economy. It also provides new insights into solving important issues facing our cities, towns and provinces. These include improving the performance of public expenditures in important areas such as local government, education, health and social policy. The author of this study has worked independently and the opinions expressed are therefore their own, and do not necessarily reflect the opinions of the board of the Frontier Centre for Public Policy.
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