Dover-based Chesapeake Utilities Corporation higher earnings in the third quarter.
In the third quarter of 2023, the company’s adjusted net income, which excludes transaction-related expenses for the announced acquisition of Florida City Gas was $12.2 million, compared to $9.7 million reported in the third quarter of 2022.
Earnings for the third quarter of 2023 were driven by continued pipeline expansion projects, organic growth in the company’s natural gas distribution businesses, contributions from the company’s Florida natural gas base rate case and increased propane margins and fees.
The improvements were partially offset by reduced customer consumption compared to the prior-year period, lower virtual pipeline services and increased interest expense attributable to higher rates on short-term borrowings and the senior notes.
During the first nine months of 2023, adjusted net income was $64.8 million compared to $63.6 million for the same period in 2022..
Year-to-date earnings in 2023 were impacted by warmer weather in service territories on the Delmarva Peninsula and in Ohio that experienced temperatures 20 percent higher than historical averages.
The impacts of weather for the first nine months of 2023 were offset by other growth contributions as well as a continued focus on cost management.
“Despite continued challenges with rising interest rates and significantly warmer temperatures through the first half of the year, Chesapeake Utilities has delivered strong performance on a year-to-date basis,” stated Jeff Householder, CEO.
“Not only do we see additional growth opportunities to drive incremental growth in our legacy businesses, but we are excited about the additional opportunities that the FCG acquisition will provide once it is a member of the Chesapeake family of businesses. We remain on track to completing the acquisition by year end. Across the organization, our team remains committed to executing on our growth strategy, achieving another record year of performance and driving increased shareholder value,” Householder stated.
Householder, who led Chesapeake’s Florida operations before becoming CEO, help to engineer the $932 million cash deal to acquire Florida City Gas, by far the company’s biggest deal. Chesapeake has grown steadily over the years but has not made big acquisitons.
The Florida City acquisition gives Chesapeake a presence on Florida’s “Gold Coast.” The utility will add 120,000 residential and commercial customers.
Chesapeake operates pipelines and natural gas utilities in Florida and the Delmarva Peninsula. It also operates a gas collection stystem from Ohio wells.