Dover-based Chesapeake Utilities Corporation reported higher adjusted earnings for the fourth quarter and the year.
Adjusted 2018 net income increased to $54.3 million from $47.3 million in 2017. Continued growth across the company’s businesses, regulatory initiatives, and colder weather were the most significant contributors to higher earnings in 2018, a release stated.
Adjusted fourth quarter 2018 net income increased to $18.2 million from $15.3 million in 2017. Higher 2018 fourth-quarter adjusted earnings reflect continued growth across the company’s businesses.
Operating revenues for the year rose to $717.5 million compared to $617.6 million in 2017.
For the year ended December 31, |
2018 |
2017 |
|||||||||||||
(in thousands, except per share data) |
Net Income |
EPS |
Net Income |
||||||||||||
Reported (GAAP) Earnings |
$ |
56,580 |
$ |
3.45 |
$ |
58,124 |
|||||||||
Unrealized mark-to-market (“MTM”) activity |
(3,706) |
(0.23) |
3,499 |
||||||||||||
One-time
impact from TCJA associated with deferred tax liability revaluation |
— |
— |
(14,299) |
||||||||||||
Non-recurring separation expenses associated with a former executive |
1,421 |
0.09 |
|||||||||||||
Adjusted (Non-GAAP) Earnings* |
$ |
54,295 |
$ |
3.31 |
$ |
47,324 |
|||||||||
For the period ended December 31, |
Fourth Quarter 2018 |
4th Qtr.2017 |
|||||||||||||
(in thousands, except per share data) |
Net Income |
EPS |
Net Income |
||||||||||||
Reported (GAAP) Earnings |
$ |
17,801 |
$ |
1.08 |
$ |
26,101 |
|||||||||
Unrealized MTM activity |
401 |
0.02 |
3,467 |
||||||||||||
One-time
impact from TCJA associated with deferred tax liability revaluation |
— |
— |
(14,299) |
||||||||||||
Adjusted (Non-GAAP) Earnings |
$ |
18,202 |
$ |
1.10 |
$ |
15,269 |
|||||||||
“Just two short months ago, I was appointed President and CEO of this very special company. I continue to be energized by everything I see, including the results discussed herein, our employees which drive our success, our commitment to providing safe, clean, reliable energy services to existing and new communities, and other potential growth opportunities,” stated Jeffry M. Householder. “2018 was another remarkable year by any measure. 2018 EPS exceeded our guidance of 17 percent growth over 2017 adjusted earnings. Earnings were driven by our highest ever increase in gross margin, which reflected strong growth across our regulated and unregulated energy businesses. Given the opportunities in our existing businesses and ongoing projects and initiatives, we are well positioned for future growth. It is an exciting time to lead this company forward.”
The company’s Florida Public Utilities Co. subsidiary took a hit when Hurricane Michael tore through its northwest Florida service territory. Householder headed the utility prior to taking over as CEO.
The hurricane caused severe damage to FPU’s infrastructure resulting in 100 percent of its customers losing electrical service.
FPU has restored service to those customers who were able to accept power following Hurricane Michael after a significant hurricane restoration effort. In conjunction with restoring these services, FPU expended over $60 million to restore service, which has been recorded as new plant and equipment or charged against FPU’s accumulated depreciation and storm reserve.
The Company has begun preparing the necessary regulatory filings to seek recovery for the costs, including replenishment of the Company’s storm reserve.
The storm did not have a material impact on the company’s financial results in 2018 as services were restored to a majority of its customers and is not expected to have a significant impact going forward as the company will be seeking recovery of the storm costs through rates.
The practice of seeking to pay for disaster-related costs through rates to customers is typical for regulated utilities, which have a cap on profit margins.
