VALLEY FORGE, PA — UGI Corporation (NYSE: UGI) has concluded its strategic review of the LPG businesses, including AmeriGas Propane, opting to retain and restructure rather than divesting it. This decision comes alongside the company’s report of robust financial results for the fiscal quarter ended March 31, 2024, showcasing resilience in its operational model and continued commitment to shareholder value.
The second-quarter results revealed a notable increase in GAAP diluted earnings per share (EPS) to $2.30 from $0.51 in the same period last year, and an adjusted diluted EPS jump to $1.97 from $1.68. Year-to-date figures also showed impressive growth, with GAAP diluted EPS rebounding to $2.74 from a previous loss of $(4.02), and adjusted diluted EPS climbing to $3.16 from $2.82.
A key driver behind these strong results was identified as higher margins from natural gas marketing activities, particularly noteworthy given the warmer than average weather conditions across UGI’s service territories. Reduced operating expenses were also credited for bolstering the company’s financial health.
Mario Longhi, Interim President and CEO of UGI, highlighted the exceptional performance and efficiency improvements across the board. “Our natural gas businesses delivered the highest second quarter earnings, reporting a 32% growth over the prior year,” Longhi stated, emphasizing the team’s dedication to operational excellence and long-term value creation for shareholders.
The strategic review of AmeriGas Propane initially considered various avenues such as sales, spin-offs, or joint ventures but ultimately zeroed in on a restructuring and operational improvement strategy. This approach aims to optimize UGI’s asset portfolio and enhance shareholder returns, signaling a clear focus on internal development rather than external divestiture.
Furthermore, UGI underscored its longstanding tradition of rewarding shareholders by declaring its 140th consecutive annual dividend. The Board announced a quarterly dividend of $0.375 per share of common stock, payable on July 1, 2024, to shareholders of record as of June 14, 2024, alongside a dividend on the company’s convertible preferred stock.
UGI’s decision to refine and retain AmeriGas Propane reflects a strategic shift towards leveraging existing assets and capabilities to secure sustained growth and profitability. This move not only reinforces UGI’s position in the volatile energy market but also affirms its pledge to deliver consistent returns to its investors.
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