Unitil Corporation (NYSE: UTL) (unitil.com) today announced Net
Income of $4.2 million, or $0.25 in Earnings Per Share (EPS) for
the second quarter of 2023, a decrease of $0.7 million in Net
Income, or $0.05 in EPS, compared to the second quarter of 2022.
For the six months ended June 30, 2023, the Company reported Net
Income of $28.3 million, or $1.76 in EPS, an increase of $1.9
million in Net Income, or $0.11 in EPS, compared to the first six
months of 2022. The Company’s Electric and Gas GAAP Gross Margins
for the second quarter of 2023 were $17.8 million and $19.4
million, respectively. For the six months ended June 30, 2023, the
Company’s Electric and Gas GAAP Gross Margins were $38.0 million
and $64.3 million, respectively.
“We are pleased with our solid second quarter and year-to-date
results which reflect the Company’s disciplined approach to cost
management,” said Thomas P. Meissner, Jr., Unitil’s Chairman and
Chief Executive Officer. “The Company’s strong financial profile
and focus on our strategic priorities, including regulatory and
sustainability initiatives, will continue to create long-term
sustainable value for all stakeholders.”
Electric GAAP Gross Margin was $17.8 million in the three months
ended June 30, 2023, a decrease of $0.1 million compared to
the same period in 2022. Electric GAAP Gross Margin was $38.0
million in the six months ended June 30, 2023, an increase of
$2.2 million compared to the same period in 2022. The decrease in
the three month period was driven by higher depreciation and
amortization expense of $0.7, partially offset by higher rates and
customer growth of $0.6 million. The increase in the six month
period was driven by higher rates and customer growth of $2.7
million, partially offset by higher depreciation and amortization
expense of $0.5 million.
Electric Adjusted Gross Margin (a non-GAAP financial measure1)
was $24.2 million and $50.9 million in the three and six months
ended June 30, 2023, respectively, increases of $0.6
million and $2.7 million, respectively, compared to the same
periods in 2022. These increases reflect higher rates and customer
growth.
_________________1 The accompanying Supplemental Information
more fully describes the non-GAAP financial measures used in this
press release and includes a reconciliation of the non-GAAP
financial measures to the financial measures that the Company’s
management believes are the most comparable GAAP financial
measures. The Supplemental Information also includes a discussion
of the changes in the most comparable GAAP financial measures for
the periods presented. _________________
Total electric kilowatt-hour (kWh) sales decreased 5.4% and 5.0%
in the three and six months ended June 30, 2023, respectively,
compared to the same periods in 2022. Sales to Residential and
Commercial and Industrial (C&I) customers decreased 7.2% and
4.3%, respectively, in the three months ended June 30, 2023,
compared to the same period in 2022, reflecting lower average
usage, partially offset by customer growth. Sales to Residential
and C&I customers decreased 6.5% and 4.0%, respectively, in the
six months ended June 30, 2023, compared to the same period in
2022, reflecting warmer winter weather in 2023 compared to 2022 and
lower average usage, partially offset by customer growth. As of
June 30, 2023, the number of electric customers increased by
approximately 200 over the previous year.
Gas GAAP Gross Margin was $19.4 million in the three months
ended June 30, 2023, an increase of $0.1 million compared to
the same period in 2022. Gas GAAP Gross Margin was $64.3 million in
the six months ended June 30, 2023, an increase of $1.5
million compared to the same period in 2022. The increase in the
three month period was driven by higher rates and customer growth
of $3.5 million, partially offset by higher depreciation and
amortization of $1.0 million and the recognition, in the second
quarter of 2022, of $2.4 million in higher rates resulting from the
Company's base rate case in New Hampshire. The increase in the six
month period was driven by higher rates and customer growth of $7.5
million, partially offset by the unfavorable effects of warmer
winter weather in 2023 of $1.1 million, higher depreciation and
amortization of $2.5 million, and the recognition, in the second
quarter of 2022, of $2.4 million in higher rates resulting from the
Company's base rate case in New Hampshire.
Gas Adjusted Gross Margin (a non-GAAP financial measure1) was
$29.3 million and $84.2 million in the three and six months ended
June 30, 2023, respectively, increases of $1.1 million and $4.0
million, respectively, compared to the same periods in 2022. These
increases reflect higher rates and customer growth of $3.5 million
and $7.5 million for the three and six month periods, respectively,
partially offset by the recognition, in the second quarter of 2022,
of $2.4 million in higher rates resulting from the Company's base
rate case in New Hampshire and, for the six month period, the
unfavorable effects of warmer winter weather in 2023 of $1.1
million.
Gas therm sales increased 0.2% and decreased 5.1% in the three
and six months ended June 30, 2023, respectively, compared to the
same periods in 2022. In the second quarter of 2023, sales to
Residential customers decreased 1.2% and sales to C&I customers
increased 0.5%, compared to the same period in 2022. In the first
six months of 2023, sales to Residential and C&I customers
decreased 7.7% and 4.4%, respectively, compared to the same period
in 2022, reflecting warmer winter weather in 2023 compared to 2022,
partially offset by customer growth. Based on weather data
collected in the Company’s gas service areas, on average there were
9.2% fewer Effective Degree Days (EDD) in the first six months of
2023 compared to the same period in 2022. The Company estimates
weather-normalized gas therm sales in its Maine division, the
Company’s only non-decoupled gas service area, increased 2.1% in
the first six months of 2023 compared to the same period in 2022.
As of June 30, 2023, the number of gas customers increased by
approximately 800 over the previous year.
Operation and Maintenance expenses decreased $0.1 million and
$0.5 million in the three and six months ended June 30, 2023,
respectively, compared to the same periods in 2022. The decrease in
the three month period reflects lower labor costs of $0.5 million,
partially offset by higher utility operating costs of $0.4 million.
The decrease in the six month period reflects lower labor costs and
professional fees of $1.1 million, partially offset by higher
utility operating costs of $0.6 million. The lower labor costs
primarily reflect lower service costs for retirement benefits and
lower restricted stock compensation.
Depreciation and Amortization expense increased $1.8 million and
$3.0 million in the three and six months ended June 30, 2023,
respectively, compared to the same periods in 2022, reflecting
additional depreciation associated with higher levels of utility
plant in service and higher amortization of rate case and other
deferred costs.
Taxes Other Than Income Taxes increased $0.1 million and $0.6
million in the three and six months ended June 30, 2023,
respectively, compared to the same periods in 2022, reflecting
higher local property taxes on higher utility plant in service and
higher payroll taxes.
Interest Expense, Net increased $0.7 million and $1.6 million,
in the three and six months ended June 30, 2023, respectively,
compared to the same periods in 2022, primarily reflecting higher
interest expense on short-term borrowings, partially offset by
lower interest expense on long-term debt and higher interest income
on regulatory assets.
Other Expense (Income), Net decreased $0.7 million and $1.4
million, in the three and six months ended June 30, 2023,
respectively, compared to the same periods in 2022, reflecting
lower retirement benefit costs.
Federal and State Income Taxes for the three and six months
ended June 30, 2023 increased $0.6 million and $1.5 million,
respectively, compared with the same periods in 2022, reflecting
higher flow back, in 2022, of excess Accumulated Deferred Income
Taxes per regulatory orders in New Hampshire, and, for the six
month period, higher pre-tax earnings in 2023.
At its January 2023, April 2023, and July 2023 meetings, the
Unitil Corporation Board of Directors declared quarterly dividends
on the Company’s common stock of $0.405 per share. These quarterly
dividends result in a current effective annualized dividend rate of
$1.62 per share, representing an unbroken record of quarterly
dividend payments since trading began in Unitil’s common stock.
The Company’s earnings historically have been seasonal and
typically have been higher in the first and fourth quarters when
customers use natural gas for heating purposes.
The Company will hold a quarterly conference call to discuss
second quarter 2023 results on Tuesday, August 1, 2023, at 10:00
a.m. Eastern Time. This call is being webcast. This call, financial
and other statistical information contained in the Company’s
presentation on this call, and information required by Regulation G
regarding non-GAAP financial measures can be accessed in the
Investor Relations section of Unitil’s website, unitil.com.
About Unitil Corporation
Unitil Corporation provides energy for life by safely and
reliably delivering electricity and natural gas in New England. We
are committed to the communities we serve and to developing people,
business practices, and technologies that lead to the delivery of
dependable, more efficient energy. Unitil Corporation is a public
utility holding company with operations in Maine, New Hampshire and
Massachusetts. Together, Unitil’s operating utilities serve
approximately 108,100 electric customers and 87,500 natural gas
customers. For more information about our people, technologies, and
community involvement please visit unitil.com.
Forward-Looking Statements
This press release may contain forward-looking statements. All
statements, other than statements of historical fact, included in
this press release are forward-looking statements. Forward-looking
statements include declarations regarding Unitil’s beliefs and
current expectations. These forward-looking statements are subject
to the inherent risks and uncertainties in predicting future
results and conditions that could cause the actual results to
differ materially from those projected in these forward-looking
statements. Some, but not all, of the risks and uncertainties
include the following: Unitil’s regulatory environment (including
regulations relating to climate change, greenhouse gas emissions
and other environmental matters); fluctuations in the supply of,
the demand for, and the prices of, energy commodities and
transmission and transportation capacity and Unitil’s ability to
recover energy commodity costs in its rates; customers’ preferred
energy sources; severe storms and Unitil’s ability to recover storm
costs in its rates; general economic conditions; variations in
weather; long-term global climate change; unforeseen or changing
circumstances, which could adversely affect the reduction of
company-wide direct greenhouse gas emissions; Unitil’s ability to
retain its existing customers and attract new customers; increased
competition; and other risks detailed in Unitil's filings with the
Securities and Exchange Commission. These forward
looking statements speak only as of the date they are made. Unitil
undertakes no obligation, and does not intend, to update these
forward-looking statements except as required by law.
For more information please
contact: |
|
|
Todd Diggins –
Investor Relations |
Alec O’Meara –
External Affairs |
Phone: 603-773-6504 |
Phone: 603-773-6404 |
|
|
Email:diggins@unitil.com |
Email:omeara@unitil.com |
Supplemental Information; Non-GAAP Financial Measures
The Company analyzes operating results using Electric and Gas
Adjusted Gross Margins, which are non-GAAP financial measures.
Electric Adjusted Gross Margin is calculated as Total Electric
Operating Revenue less Cost of Electric Sales. Gas Adjusted Gross
Margin is calculated as Total Gas Operating Revenues less Cost of
Gas Sales. The Company’s management believes Electric and Gas
Adjusted Gross Margins provide useful information to investors
regarding profitability. Also, the Company’s management believes
Electric and Gas Adjusted Gross Margins are important measures to
analyze revenue from the Company’s ongoing operations because the
approved cost of electric and gas sales are tracked, reconciled and
passed through directly to customers in electric and gas tariff
rates, resulting in an equal and offsetting amount reflected in
Total Electric and Gas Operating Revenue.
In the following tables the Company has reconciled Electric and
Gas Adjusted Gross Margin to GAAP Gross Margin, which we believe to
be the most comparable GAAP financial measure. GAAP Gross Margin is
calculated as Revenue less Cost of Sales, and Depreciation and
Amortization. The Company calculates Electric and Gas Adjusted
Gross Margin as Revenue less Cost of Sales. The Company believes
excluding Depreciation and Amortization, which are period costs and
not related to volumetric sales, is a meaningful measure to inform
investors of the Company’s profitability from electric and gas
sales in the period.
Three Months Ended June 30, 2023 ($ millions) |
|
|
|
|
|
|
Electric |
Gas |
Other |
Total |
Total Operating Revenue |
$ |
64.5 |
|
$ |
38.9 |
|
$ |
--- |
|
$ |
103.4 |
|
Less: Cost of Sales |
|
(40.3 |
) |
|
(9.6 |
) |
|
--- |
|
|
(49.9 |
) |
Less: Depreciation and
Amortization |
|
(6.4 |
) |
|
(9.9 |
) |
|
(0.3 |
) |
|
(16.6 |
) |
GAAP Gross Margin |
|
17.8 |
|
|
19.4 |
|
|
(0.3 |
) |
|
36.9 |
|
Depreciation and
Amortization |
|
6.4 |
|
|
9.9 |
|
|
0.3 |
|
|
16.6 |
|
Adjusted Gross Margin |
$ |
24.2 |
|
$ |
29.3 |
|
$ |
--- |
|
$ |
53.5 |
|
Three Months Ended June 30, 2022 ($ millions) |
|
|
|
|
|
|
Electric |
Gas |
Other |
Total |
Total Operating Revenue |
$ |
54.3 |
|
$ |
44.6 |
|
$ |
--- |
|
$ |
98.9 |
|
Less: Cost of Sales |
|
(30.7 |
) |
|
(16.4 |
) |
|
--- |
|
|
(47.1 |
) |
Less: Depreciation and
Amortization |
|
(5.7 |
) |
|
(8.9 |
) |
|
(0.2 |
) |
|
(14.8 |
) |
GAAP Gross Margin |
|
17.9 |
|
|
19.3 |
|
|
(0.2 |
) |
|
37.0 |
|
Depreciation and
Amortization |
|
5.7 |
|
|
8.9 |
|
|
0.2 |
|
|
14.8 |
|
Adjusted Gross Margin |
$ |
23.6 |
|
$ |
28.2 |
|
$ |
--- |
|
$ |
51.8 |
|
Six Months Ended June 30, 2023 ($ millions) |
|
|
|
|
|
|
Electric |
Gas |
Other |
Total |
Total Operating Revenue |
$ |
172.7 |
|
$ |
150.9 |
|
$ |
--- |
|
$ |
323.6 |
|
Less: Cost of Sales |
|
(121.8 |
) |
|
(66.7 |
) |
|
--- |
|
|
(188.5 |
) |
Less: Depreciation and
Amortization |
|
(12.9 |
) |
|
(19.9 |
) |
|
(0.5 |
) |
|
(33.3 |
) |
GAAP Gross Margin |
|
38.0 |
|
|
64.3 |
|
|
(0.5 |
) |
|
101.8 |
|
Depreciation and
Amortization |
|
12.9 |
|
|
19.9 |
|
|
0.5 |
|
|
33.3 |
|
Adjusted Gross Margin |
$ |
50.9 |
|
$ |
84.2 |
|
$ |
--- |
|
$ |
135.1 |
|
Six Months Ended June 30, 2022 ($ millions) |
|
|
|
|
|
|
Electric |
Gas |
Other |
Total |
Total Operating Revenue |
$ |
143.5 |
|
$ |
148.0 |
|
$ |
--- |
|
$ |
291.5 |
|
Less: Cost of Sales |
|
(95.3 |
) |
|
(67.8 |
) |
|
--- |
|
|
(163.1 |
) |
Less: Depreciation and
Amortization |
|
(12.4 |
) |
|
(17.4 |
) |
|
(0.5 |
) |
|
(30.3 |
) |
GAAP Gross Margin |
|
35.8 |
|
|
62.8 |
|
|
(0.5 |
) |
|
98.1 |
|
Depreciation and
Amortization |
|
12.4 |
|
|
17.4 |
|
|
0.5 |
|
|
30.3 |
|
Adjusted Gross Margin |
$ |
48.2 |
|
$ |
80.2 |
|
$ |
--- |
|
$ |
128.4 |
|
Selected financial data for 2023 and 2022 is presented in the
following table:
|
Unitil Corporation – Condensed Consolidated Financial
Data |
(Millions, except Per Share data)(Unaudited) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
Change |
|
2023 |
|
2022 |
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric kWh Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
133.4 |
|
|
|
143.7 |
|
|
(7.2 |
%) |
|
|
|
314.7 |
|
|
|
336.5 |
|
|
(6.5 |
%) |
Commercial/Industrial |
|
|
214.3 |
|
|
|
224.0 |
|
|
(4.3 |
%) |
|
|
|
442.8 |
|
|
|
461.2 |
|
|
(4.0 |
%) |
Total Electric kWh Sales |
|
|
347.7 |
|
|
|
367.7 |
|
|
(5.4 |
%) |
|
|
|
757.5 |
|
|
|
797.7 |
|
|
(5.0 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Therm Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
8.2 |
|
|
|
8.3 |
|
|
(1.2 |
%) |
|
|
|
30.1 |
|
|
|
32.6 |
|
|
(7.7 |
%) |
Commercial/Industrial |
|
|
37.4 |
|
|
|
37.2 |
|
|
0.5 |
% |
|
|
|
106.8 |
|
|
|
111.7 |
|
|
(4.4 |
%) |
Total Gas Therm Sales |
|
|
45.6 |
|
|
|
45.5 |
|
|
0.2 |
% |
|
|
|
136.9 |
|
|
|
144.3 |
|
|
(5.1 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electric
Revenues |
|
$ |
64.5 |
|
|
$ |
54.3 |
|
$ |
10.2 |
|
|
|
$ |
172.7 |
|
|
$ |
143.5 |
|
$ |
29.2 |
|
Cost of Electric Sales |
|
|
40.3 |
|
|
|
30.7 |
|
|
9.6 |
|
|
|
|
121.8 |
|
|
|
95.3 |
|
|
26.5 |
|
Electric Adjusted Gross Margin(a non-GAAP
financial
measure1): |
|
|
24.2 |
|
|
|
23.6 |
|
|
0.6 |
|
|
|
|
50.9 |
|
|
|
48.2 |
|
|
2.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas
Revenues |
|
|
38.9 |
|
|
|
44.6 |
|
|
(5.7 |
) |
|
|
|
150.9 |
|
|
|
148.0 |
|
|
2.9 |
|
Cost of Gas Sales |
|
|
9.6 |
|
|
|
16.4 |
|
|
(6.8 |
) |
|
|
|
66.7 |
|
|
|
67.8 |
|
|
(1.1 |
) |
Gas Adjusted Gross Margin(a non-GAAP
financial
measure1): |
|
|
29.3 |
|
|
|
28.2 |
|
|
1.1 |
|
|
|
|
84.2 |
|
|
|
80.2 |
|
|
4.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjusted Gross Margin(a non-GAAP
financial
measure1): |
|
|
53.5 |
|
|
|
51.8 |
|
|
1.7 |
|
|
|
|
135.1 |
|
|
|
128.4 |
|
|
6.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operation & Maintenance
Expenses |
|
|
18.3 |
|
|
|
18.4 |
|
|
(0.1 |
) |
|
|
|
36.4 |
|
|
|
36.9 |
|
|
(0.5 |
) |
Depreciation &
Amortization |
|
|
16.6 |
|
|
|
14.8 |
|
|
1.8 |
|
|
|
|
33.3 |
|
|
|
30.3 |
|
|
3.0 |
|
Taxes Other Than Income
Taxes |
|
|
6.8 |
|
|
|
6.7 |
|
|
0.1 |
|
|
|
|
14.1 |
|
|
|
13.5 |
|
|
0.6 |
|
Other (Income) Expense,
Net |
|
|
(0.1 |
) |
|
|
0.6 |
|
|
(0.7 |
) |
|
|
|
(0.1 |
) |
|
|
1.3 |
|
|
(1.4 |
) |
Interest Expense, Net |
|
|
7.0 |
|
|
|
6.3 |
|
|
0.7 |
|
|
|
|
14.1 |
|
|
|
12.5 |
|
|
1.6 |
|
Income Before Income
Taxes |
|
|
4.9 |
|
|
|
5.0 |
|
|
(0.1 |
) |
|
|
|
37.3 |
|
|
|
33.9 |
|
|
3.4 |
|
Provision for Income
Taxes |
|
|
0.7 |
|
|
|
0.1 |
|
|
0.6 |
|
|
|
|
9.0 |
|
|
|
7.5 |
|
|
1.5 |
|
Net
Income |
|
$ |
4.2 |
|
|
$ |
4.9 |
|
$ |
(0.7 |
) |
|
|
$ |
28.3 |
|
|
$ |
26.4 |
|
$ |
1.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share |
|
$ |
0.25 |
|
|
$ |
0.30 |
|
$ |
(0.05 |
) |
|
|
$ |
1.76 |
|
|
$ |
1.65 |
|
$ |
0.11 |
|
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