Chesapeake Utilities Corporation, Dover, reported flat earnings during the first quarter.
Net income for the quarter ended March 31, was $28.9 million, compared to $28.7 million for the same quarter of 2019. Revenues neared $153 million, compared to nearly $160 million a year.
Earnings for the first quarter reflect increased gross margin from recently completed and ongoing pipeline expansion projects, incremental margins from the acquisition of certain assets of Boulden Inc., Newark, growth in the natural gas distribution operations, and higher retail propane margins.
Weather during the first quarter, was 20 and 17 percent warmer than the first quarter of 2019 on the Delmarva Peninsula and in Ohio, respectively, a reflection of lower consumption and reduced net income.
.The weather impact was essentially offset by gains from two property sales totaling $2.3 million on an after-tax basis.
The property sales related to operations which have been consolidated into the company’s Energy Lane campus in Dover and through the completion of the conversion of the piped propane system in Ocean City, MD to natural gas service.
Absent from the company’s first-quarter results was regulatory relief associated with Hurricane Michael. The company filed a limited proceeding with the Florida Public Service Commission (“PSC”) in August 2019 and continues to engage in discussions with the Florida PSC staff and the Office of Public Counsel and expects a final ruling in the second half of 2020.
Interim rates related to this limited proceeding were implemented in January 2020 and have been fully reserved pending final resolution with the Florida PSC.
In response to the COVID-19 pandemic and related restrictions, the Company implemented its pandemic response plan, which includes having all employees who can work remotely do so in order to promote social distancing and providing personal protective equipment to field employees to reduce the spread of COVID-19. For the first quarter of 2020, the COVID-19 impact on the Company was immaterial, as slightly lower gross margin was offset by lower operating expenses.
“I am pleased with the company’s strong performance during the first quarter despite the many challenges that we faced. Achieving increased performance quarter-over-quarter was a significant accomplishment in the face of significantly warmer temperatures, the absence of regulatory relief associated with Hurricane Michael and the onset of the COVID-19 outbreak. Our employees continue to generate increased performance for the company, while remaining committed to each other and our customers. Our growth projects are moving forward even in the midst of COVID-19 and we continue to target the higher EPS guidance through 2022 that we introduced in February 2020″ stated Jeffry M. Householder, CEO.
Chesapeake operates natural gas utilities on the Delmarva Peninsula and Florida. It has operates natural gas pipelines and an electric utility in northeast Florida.