Workflow
Unitil(UTL) - 2024 Q2 - Earnings Call Transcript
UTLUnitil(UTL)2024-08-06 19:53
Filings

Financial Data and Key Metrics Changes - The company reported second quarter net income of 4.3millionor4.3 million or 0.27 per share, an increase of 0.02persharecomparedtothesameperiodin2023[5]−Forthefirsthalfoftheyear,netincomewas0.02 per share compared to the same period in 2023 [5] - For the first half of the year, net income was 31.5 million or 1.96pershare,representinganincreaseof1.96 per share, representing an increase of 0.20 per share over the same period in 2023 [5] - The consolidated GAAP return on equity was 9.8% over the last 12 months [5] Business Line Data and Key Metrics Changes - Electric adjusted gross margin was 52millionforthesixmonthsendedJune30,2024,anincreaseof52 million for the six months ended June 30, 2024, an increase of 1.1 million compared to the same period in 2023, driven by higher distribution rates and customer growth [12] - Gas adjusted gross margin was 92.3millionforthefirstsixmonthsendedJune30,2024,anincreaseof92.3 million for the first six months ended June 30, 2024, an increase of 8.1 million or approximately 10% compared to the same period in 2023, also reflecting higher distribution rates and customer growth [13] Market Data and Key Metrics Changes - The company added approximately 750 new electric customers and 1,100 new gas customers compared to the same period in 2023 [12][13] - The Bangor Natural Gas Company acquisition is expected to enhance customer growth, with the company serving about 8,500 customers and experiencing a historical growth rate of roughly 5% annually over the last five years [9] Company Strategy and Development Direction - The company reaffirmed its long-term earnings growth target of 5% to 7%, supported by rate base growth in the range of 6.5% to 8.5% and a dividend payout ratio between 55% and 65% [5] - The capital investment plan through 2028 totals approximately 910million,withadditionalopportunitiesforinvestmentsinelectricsystemmodernizationandutility−scalesolarprojects[10][11]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidencethatfullyearearningswillbewithinthelong−termguidancerangeandhighlightedtheconstructivenatureofrecentregulatoryoutcomes[5][21]−Thecompanyisfocusedonexecutingitsregulatoryagenda,capitalinvestmentplan,andcostcontrolinitiativestosupportfuturegrowth[5]OtherImportantInformation−ThecompanyreceivedaratecaseorderforitselectricandgasdivisionsinMassachusetts,withnewbasedistributionratestakingeffectonJuly1[15]−ThepurchasepriceforBangorNaturalGasCompanyis910 million, with additional opportunities for investments in electric system modernization and utility-scale solar projects [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that full year earnings will be within the long-term guidance range and highlighted the constructive nature of recent regulatory outcomes [5][21] - The company is focused on executing its regulatory agenda, capital investment plan, and cost control initiatives to support future growth [5] Other Important Information - The company received a rate case order for its electric and gas divisions in Massachusetts, with new base distribution rates taking effect on July 1 [15] - The purchase price for Bangor Natural Gas Company is 70.9 million, with an enterprise value representing a multiple of approximately 1.2x estimated rate base as of year-end 2023 [9] Q&A Session Summary Question: What is the outlook for the company's growth and regulatory environment? - Management indicated that they are currently earning authorized returns on a consolidated basis and that recent regulatory outcomes remain constructive, supporting future growth [21]