Unitil Corporation (UTL) on Q1 2021 Results - Earnings Call Transcript
Operator: Good afternoon and welcome to the Q1 2021 Unitil Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Todd Diggins, Director of Finance. Please go ahead.
Todd Diggins: Good afternoon and thank you for joining us to discuss Unitil Corporation's First Quarter 2021 Financial Results. Speaking on the call today will be Tom Meissner, Chairman, President and Chief Executive Officer; and Bob Hevert, Senior Vice President, Chief Financial Officer and Treasurer. We will discuss financial and other information on this call.
Tom Meissner: Thanks, Todd, and good afternoon, everyone. I'm going to begin on slide four. Today, we are pleased to announce net income of $18.9 million or $1.26 per share for the first quarter of 2021. This represents an increase of $3.7 million or $0.24 per share compared to 2020. I'm also pleased to note that on April 2, we filed a strategic multiyear rate plan at our New Hampshire electric utility which, in addition to requesting a base rate increase, includes a number of proposals to support the evolving energy needs of our customers and stakeholders. Bob will discuss the details of this filing later in the call. Looking forward, we're encouraged by signs of economic growth in the states we serve. In fact, as of March, New Hampshire is now home to the two hottest housing markets as well as two of the top 10 emerging housing markets in the nation. Finally, we remain committed to our long-term guidance of 5% to 7% growth in earnings per share. Our first quarter results reflect our on-going operating and regulatory initiatives as well as sustained customer growth that will help us to achieve strong results in the future. Now moving on to slide five. I'll provide an update on some of the latest economic conditions in the areas we serve, which we view with growing optimism. It's hard to believe that the onset of this pandemic was just over a year ago, but I want to again mention how pleased I've been with the dedication, resilience and sheer determination of our employees in responding to this crisis. It's been a trying time, but we're now seeing encouraging signs of an accelerating economic recovery across our service areas.
Robert Hevert: Thank you, Tom, and good afternoon, everyone. I will begin on slide seven. As Tom noted, this morning, we announced first quarter earnings per share of $1.26. Net income for the quarter increased by $3.7 million or $0.24 per share compared to the same quarter in 2020. Our strong year-over-year earnings growth principally is a result of higher sales margins, which increased as a result of higher distribution rates, colder winter weather and continued customer growth. As you recall, weather in the first quarter of 2020 was historically warm and affected earnings by an estimated $0.20 per share. By comparison, the winter weather in the first quarter of 2021, although somewhat warmer than normal, was significantly colder than the first quarter of 2020.
Tom Meissner: Thanks Bob. Now wrapping up with slide 14. With the first quarter of 2021 behind us, we're pleased with the company's results as well as the broader economic recovery. The foundation of our business is strong, and we view the future with increasing optimism. Unitil offers long-term sustainable shareholder growth, paired with an attractive dividend and robust investment opportunities. As I mentioned earlier, we expect long-term EPS growth of 5% to 7%, with near-term earnings growth likely at the higher end of the long-term range relative to our 2020 earnings. Thank you for your participation today. And with that, I'll turn it back to you, Todd.
Todd Diggins: Great. Thanks, Tom. That wraps up the material in this call. Thank you for attending. I will now turn the call over to the operator, who will coordinate questions.
Operator: Thank you, Todd. Your first question comes from the line of Michael Gaugler with Janney Montgomery.
Michael Gaugler: Good afternoon, everyone.
Robert Hevert: Hi, Mike.
Tom Meissner: Hi, Mike.
Michael Gaugler: So given your housing market, just wondering what your organic growth outlook is going out, let's say, for the next few years?
Robert Hevert: Yes. Mike, this is Bob Hevert. We're looking at the housing market, and we do think it's very hot. As Tom mentioned, we have in New Hampshire, two of the hottest and emerging housing markets in the country. Now as we're looking at organic growth going forward, we think we're retaining our existing projections. So we're not really extrapolating what we're seeing right now, Mike, going forward.
Michael Gaugler: All right, so I had. Gentlemen, thank you.
Robert Hevert: Thank you, Mike.
Operator: Your next question comes from the line of Shelby Tucker with RBC Capital Markets.
Shelby Tucker: Good afternoon. On your rate case for New Hampshire, can you remind me if there is a precedence of multiyear decisions?
Robert Hevert: Hey Shelby, it's Bob Hevert. Yes, there is. The last two cases that we filed in New Hampshire, both had multiyear plans, both three years in duration, and both were very comparable to what we've proposed here in terms of the step adjustments reflecting non-growth related capital investments. So yes, there is precedent. And we did try to follow that precedent quite closely as we developed our filing in this case.
Shelby Tucker: Got it. And then picking up on Mike's question. If there's a change in pace of build-out, are there adjustments that can be made to the multiyear plan? Or are you kind of -- you're positioned that way going for the next three years?
Robert Hevert: No. That's a great question. No, we -- each year, Shelby, we will propose the step adjustment. And we are not bound by what we expect right now. And in fact, in our current filing, the step adjustments we show are effectively illustrative. They're our best estimate of what the adjustments will be going forward 1, two and three years, but they're not definitive. And as those years come up, as we make those filings, we certainly would reflect the conditions at the time.
Shelby Tucker: Got it. Okay, thank you very much.
Robert Hevert: Thank you.
Operator:
