The past month has been a rough one for Canada-based energy provider Just Energy.
In the company’s Q1 corporate summary, Just Energy revealed that its Board of Directors decided to suspend common share dividends “until further notice.” The same report revealed another significant issue: churn.
The company’s net customer additions were 97,000 lower this year than at the same point last year, a data point that equals a 41% churn rate in Just Energy’s customer base.
Furthermore, the company’s stock price saw a precipitous decline shortly after the Q1 report, dropping $3.10 on Aug. 14 to $1.18 seven days later.
Company Brought in New CEO Before Q1 Earnings Release
The company’s board knew a change needed to be made earlier this year. In August, the company announced the departure of CEO and president Patrick McCullough. The company named R. Scott Gahn as the new CEO.
Gahn was the CEO Just Energy Texas LP and served on the Electric Reliability Council of Texas from 2005 to 2008.
Just Energy Executive Chair Rebecca MacDonald said in a company statement Gahn was the right fit because of his “strong background in executing transactions in the deregulated energy industry.”
Just Energy Focusing on Better Customers, Better Customer Products
The Gahn hiring fit with Just Energy’s announcement at its 2018 Investors Day in New York that they would launch new “value-added products and services” in certain regulated markets.
The efforts have not produced positive results, according to the company’s internal investor documents.
Gahn said in the Q1 earnings call the goal for the rest of the fiscal year is to sign “high-quality customers.”
“Our objective for the remainder of the fiscal year is clear — we must sign high-quality customers who utilize our suite of value-added products and services while we simultaneously reduce our costs by eliminating redundancies and improving processes,” he said.
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