Chesapeake Utilities Corporation Reports Third Quarter Results

Operating income for the Regulated Energy segment increased by $2.1 million, or 15.7 percent, compared to the same period in 2016. Higher operating income resulted from increased gross margin of $1.5 million during the quarter, or 3.4 percent, and a decrease in other operating expenses of $519,000.

The significant components of the $1.5 million gross margin increase included:

• $1.0 million of incremental revenue from the implementation of new rates for Eastern Shore, which were effective August 1, 2017.
• $406,000 generated from additional GRIP investments in the Florida natural gas distribution operations; and
• $566,000 increase from customer growth in the natural gas distribution businesses (excluding service expansions) which was partially offset by a $219,000 decrease in interruptible margin from Eastern Shore.

The significant factors contributing to the net decrease of $519,000 in other operating expenses included:

• $1.6 million in lower outside services and facilities and maintenance costs, due primarily to lower consulting and service contractor costs;
• $437,000 in lower benefits and employee-related costs in 2017 (since the Company is self-insured for healthcare, benefits costs fluctuate depending upon claims filed);
• $1.4 million in higher depreciation, asset removal and property tax costs associated with recent capital investments.

Unregulated Energy Segment

Operating income for the Unregulated Energy segment increased by $2.1 million, or 67.9 percent, compared to the same period in 2016. Gross margin increased by $3.1 million, or 30.1 percent, which was offset by an increase of $1.0 million, or 7.4 percent, in other operating expenses.

The significant components of the $3.1 million gross margin increase were as follows:

• $1.2 million of additional gross margin from increased sales volumes of propane to wholesale and retail customers on the Delmarva Peninsula and in Florida as well as higher sales of natural gas by Aspire Energy;
• $440,000 and $271,000 of additional gross margin from retail and wholesale propane margins, respectively, due primarily to favorable supply management activities;
• $297,000 of additional gross margin from Eight Flags operations, which was fully on-line in the third quarter of 2017;
• $291,000 of additional gross margin from Aspire Energy as a result of pricing amendments to long-term sales agreements; and
• $233,000 in increased gross margin due to the absence of the loss for Xeron recorded in the third quarter of 2016.

The principal components of the $1.0 million increase in other operating expenses were: $730,000 in higher staffing and associated costs for additional personnel to support growth, $293,000 in expenses associated with the incremental margin from Eight Flags, and $347,000 in higher depreciation, amortization and property tax costs due to increased capital investments and amortization of intangible assets acquired through acquisitions in 2017. 

Comparative Results for the Nine Months Ended September 30, 2017 and 2016

Operating income for the nine months ended September 30, 2017 increased by $303,000 to $62.6 million, compared to $62.3 million for the same period in 2016. Gross margin increased by $14.0 million, or 7.3 percent, net of the negative impact of weather, which reduced margin by approximately $1.8 million for the first nine months. Other operating expenses increased by $13.7 million, or 10.7 percent, due primarily to a $4.3 million increase in depreciation, amortization and property taxes and a $9.4 million increase in other operating expenses to support growth.

Regulated Energy Segment

Operating income for the Regulated Energy segment decreased by $745,000, or 1.4 percent, compared to the same period in 2016, due principally to weather and the level and timing of costs associated with growth. Gross margin increased by $5.7 million, despite the impact of weather, which reduced margin by approximately $850,000 for the nine months ended September 30, 2017. The $3.5 million increase in depreciation, amortization and taxes and $3.0 million increase in other operating expenses largely reflect costs associated with recently completed and planned growth projects. Of the total $6.4 million increase in other operating expenses, $4.7 million is associated with Eastern Shore's recently completed projects as well as initiatives that are currently underway.

The significant components of the $5.7 million gross margin increase included:

• $1.6 million generated by additional GRIP investments in the Florida natural gas distribution operations;
• $1.6 million from growth in natural gas distribution and transmission services (excluding service expansions);
• $1.4 million generated from recently completed natural gas transmission expansions, which are more fully discussed in the "Major Projects and Initiatives" section later in this press release;
• $1.0 million from the implementation of Eastern Shore's new rates, as discussed previously;
• $534,000 from new natural gas transmission and distribution services provided to Eight Flags' CHP plant; and
• $249,000 generated as a result of the rate case settlement by the Company's Delaware natural gas distribution operations.

The foregoing increases were offset by a decrease in gross margin of $1.2 million from lower customer consumption of energy for the Company's distribution operations in Florida and on the Delmarva Peninsula, due primarily to weather, particularly warmer weather during the first quarter.

The significant components of the $6.4 million increase in other operating expenses included:

• $3.5 million in higher depreciation, asset removal and property tax costs associated with recent capital investments;
• $1.6 million in higher payroll costs for additional personnel to support growth;
• $855,000 in increased regulatory expenses, due primarily to Eastern Shore's rate case; and
• $722,000 in higher benefits and employee-related costs in 2017 (since the Company is self-insured for healthcare, benefits costs fluctuate depending upon filed claims).

Unregulated Energy Segment

Operating income for the Unregulated Energy segment for the nine months ended September 30, 2017 was $10.5 million, an increase of $1.2 million, or 13.3 percent, compared to the same period in 2016. Gross margin increased by $8.4 million, or 18.6 percent, which was offset by an increase of $7.2 million, or 20.0 percent, in operating expenses for the nine months ended September 30, 2017.

The significant components of the $8.4 million gross margin increase were as follows:

• $4.2 million of additional gross margin from Eight Flags' CHP plant, which commenced operations in June 2016;
• $1.8 million from PESCO, due to an increase in the number of contracts and customers served as well as additional revenue in the first quarter from providing natural gas to a customer in Ohio under a supplier agreement, which expired on March 31, 2017;
• $1.1 million of additional gross margin from Aspire Energy as a result of pricing amendments to long-term gas sales agreements;
• $728,000 of additional gross margin from wholesale propane sales, due primarily to favorable supply management activities; and
• $168,000 of additional gross margin, due primarily to higher sales of propane in Florida, a portion of which was associated with the timing of deliveries due partially to weather conditions in the third quarter of 2017, offset by the impact of warmer weather during the first six months of 2017.

The significant components of the $7.2 million increase in other operating expenses included:

• $2.8 million in higher operating expenses by Eight Flags' CHP plant in support of the margin generated;
• $1.5 million in higher payroll costs for additional personnel to support growth;
• $950,000 in higher benefits and employee-related costs in 2017 (since the Company is self-insured for healthcare, benefits costs fluctuate depending upon claims filed);
• $800,000 in higher depreciation expense, of which $424,000 relates to a credit adjustment in 2016 recorded in conjunction with the final valuation for Aspire Energy; and
• $350,000 in higher outside services costs associated primarily with growth and ongoing compliance activities.

The Company also incurred $367,000 in non-operating expenses to complete the wind-down of Xeron's operations.

Matters discussed in this release may include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements. Please refer to the Safe Harbor for Forward-Looking Statements in the Company's 2016 Annual Report on Form 10-K for further information on the risks and uncertainties related to the Company's forward-looking statements.

The discussions of the results use the term "gross margin," a non-Generally Accepted Accounting Principles ("GAAP") financial measure, which management uses to evaluate the performance of the Company's business segments. For an explanation of the calculation of "gross margin," see the footnote to the Financial Summary.

Unless otherwise noted, earnings per share are presented on a diluted basis.

Conference Call

Chesapeake Utilities will host a conference call on Friday, November 10, 2017, at 10:30 a.m. Eastern Time to discuss the Company's financial results for the quarter and nine months ended September 30, 2017. To participate in this call, dial 855.801.6270 and reference Chesapeake Utilities' 2017 Third Quarter Financial Results Conference Call. To access the replay recording of this call, please visit the Company's website at http://investor.chpk.com/results.cfm or download the replay on your mobile device by accessing the Audio cast section of the Company's IR App.

About Chesapeake Utilities Corporation

Chesapeake Utilities is a diversified energy company engaged in natural gas distribution, transmission, gathering and processing, and marketing; electricity generation and distribution; propane gas distribution; and other businesses. Information about Chesapeake Utilities and its family of businesses is available at http://www.chpk.com or through its IR App.

Please note that Chesapeake Utilities Corporation is not affiliated with Chesapeake Energy, an oil and natural gas exploration company headquartered in Oklahoma City, Oklahoma.

For more information, contact:

Beth W. Cooper
Senior Vice President & Chief Financial Officer
302.734.6799

Financial Summary (in thousands, except per share data)
	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2017				2016				2017				2016
Gross Margin (1)
Regulated Energy segment	$	46,909			$	45,375			$	151,147			$	145,446
Unregulated Energy segment	13,272				10,202				53,827				45,380
Other businesses and eliminations	(105)				(57)				(325)				(166)
Total Gross Margin	$	60,076			$	55,520			$	204,649			$	190,660
Operating Income
Regulated Energy segment	$	15,168			$	13,115			$	51,915			$	52,660
Unregulated Energy segment	(989)				(3,080)				10,504				9,267
Other businesses and eliminations	60				121				161				350 Werbung Mehr Nachrichten zur Chesapeake Utilities Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 25.04.24 - PR Newswire Mid Wynd International Investment Trust Plc - Transaction in Own Shares 25.04.24 - PR Newswire Norges Bank - Form 8.3 - BHP Group Limited SolarBank    Wie die Revolution der sauberen Energie eine solide Investitionsmöglichkeit bieten könnte weiterlesen» Anzeige wo-site-teaser-box-16755_site-teaser-box_2024-04-25_09%253A00%253A00_2024-04-26_09%253A00%253A59