MDU Resources (MDU) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported full-year earnings of $281.1 million or$ 1.37 per share on a GAAP basis for 2024, compared to $414.7 million or$ 2.03 per share in 2023 [22] - Income from continuing operations for 2024 was $181.1 million or$ 0.88 per share, down from $330.1 million or$ 1.62 per share in 2023 [23] - Adjusted income from continuing operations for 2024 was $184.4 million or$ 0.90 per share, a 22% increase compared to $150.8 million or$ 0.74 per share in 2023 [24] Business Line Data and Key Metrics Changes - The Electric Utility segment reported earnings of $74.8 million in 2024, up from$ 71.6 million in 2023, primarily due to higher retail sales revenue from rate relief [25] - The Natural Gas segment reported earnings of $46.9 million in 2024, down from$ 48.5 million in 2023, attributed to higher operation and maintenance expenses [26] - The Pipeline segment achieved record earnings of $68 million in 2024, compared to$ 46.9 million in 2023, driven by record transportation volumes and increased storage revenue [27][28] Market Data and Key Metrics Changes - The combined retail customer base grew by 1.4% in 2024, indicating a need for proactive management of utility infrastructure [11] - The company experienced a 6.8% growth in rate base in 2024 [11] Company Strategy and Development Direction - The company aims to be a pure-play regulated energy delivery business, focusing on continued growth and operational excellence [9][18] - A capital investment of $3.1 billion is anticipated over the next five years, targeting 7% to 8% utility rate base growth and 1% to 2% annual customer growth [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth prospects, citing strong performance in electric and natural gas utilities and pipeline services [20] - The company is focused on delivering safe and reliable services while seeking regulatory recovery for investments [14] Other Important Information - The company completed the spin-off of Everus Construction Group and Knife River, with results reported as discontinued operations [6] - The company initiated 2025 earnings per share guidance in the range of$ 0.88 to $0.98 per share, reflecting strong performance across segments [17] Q&A Session Summary Question: Change in guidance around equity issuance - Management clarified that there is no real change in the guidance regarding equity issuance, with no expected equity issuance in 2025 [34] Question: Northwest North Dakota gas potential pipeline expansion - Management indicated that the project is to serve a natural gas-fired electric generating station, with capital increases anticipated in 2028 [38] Question: Breakdown of 2025 guidance - Management discussed potential drivers for reaching the high end of the guidance range, including strong storage performance and rate relief [58][60] Question: Bakken East nonbinding MOU - Management confirmed that they are evaluating results from the open season and will move towards binding commitments based on customer interest [68]