VALLEY FORGE, PA — UGI Corporation (NYSE: UGI) recently reported financial results for the fiscal quarter ended March 31, 2020.
- Q2 GAAP EPS of $1.07 and adjusted EPS of $1.56 per diluted share compared to GAAP EPS of $1.38 and adjusted EPS of $1.43 per diluted share in the prior-year period.
- Year-to-date GAAP EPS of $2.08 and adjusted EPS of $2.73 per diluted share represent a 20% increase in GAAP EPS and a 22% increase in adjusted EPS compared to the prior year.
- Q2 Reportable segments earnings before interest expense and income taxes of $527.4 million compared to $550.5 million in the prior-year period.
- Significantly warmer-than-normal weather in all of UGI’s service territories.
- On April 21, 2020, UGI’s Board of Directors approved an increase to its quarterly dividend to $0.33 per share marking the 33rd consecutive year of annual dividend increases.
- As of March 31, 2020, UGI Corporation had available liquidity of $1.2 billion.
- Decreased capital expenditures guidance to $730 million from $850 million for fiscal 2020 as a result of delays related to COVID-19. These projects are expected to be executed in fiscal 2021. The updated timing of the projects supports free cash flow in fiscal 2020.
- Updated fiscal year 2020 adjusted EPS guidance to a range of $2.45 – $2.55 per share prior to the COVID-19 impact, and anticipate that the pandemic could negatively impact earnings by an additional $0.20 – $0.30 per share.
“As we announce our second quarter results, our employees, customers, communities and the world continue to address the major impacts of the COVID-19 pandemic,” said John L. Walsh, President and Chief Executive Officer of UGI Corporation.
“We continue to serve our customers, prioritize the safety of our employees and customers, and support the communities we serve. UGI’s businesses have contributed time and resources to support front line workers and community-based agencies providing critical services to our local communities.
“UGI has adapted its work practices to ensure we do our part to limit the spread of the virus and we remain committed to being a trusted partner for all of our stakeholders.
“Our solid year-to-date earnings were delivered despite the impact of historically warm weather in our second quarter. UGI’s core operations were positioned to deliver adjusted EPS of approximately $2.45 – $2.55 for fiscal 2020 before the COVID-19 pandemic.
“COVID-19 did not materially impact our results through March 31st, but we expect to experience some volume losses for the remainder of the year, particularly relating to commercial customers. As each day passes, we receive more information and will continue to assess uncertainties and refine our projections.
“Currently we anticipate that the pandemic could negatively impact fiscal year 2020 earnings by approximately $0.20 – $0.30 per share. We will continue to update you as more information becomes available.
“Our liquidity position remains very strong as a result of disciplined balance sheet management through all market conditions. As of March 31, 2020, our total available liquidity was $1.2 billion. Two weeks ago, we announced that UGI increased its dividend for the 33rd consecutive year.
“Lastly, we want you to know that the health, well-being and safety of our employees, customers, and communities remains our top priority” Mr. Walsh concluded.
KEY DRIVERS OF SECOND QUARTER RESULTS
- AmeriGas: Retail volume decreased 11.4% on weather that was 12.9% warmer than the prior year; Cylinder Exchange volumes increased 17.7% while National Accounts volumes decreased 2.7% compared to the prior-year period; lower operating and administrative expenses due to disciplined expense management
- UGI International: Retail volume decreased 10.9% largely a result of weather that was 5.8% warmer than the prior year and from the termination of a low margin autogas contract in Italy; volume loss was partially offset by higher average LPG unit margins due to effective margin management and higher margins from energy marketing; lower operating and administrative expenses due to disciplined expense management
- Midstream & Marketing: Higher natural gas gathering margin attributable to UGI Appalachia; higher peaking margin due to higher LNG trucking volume and additional peaking contracts compared to the prior-year period
- UGI Utilities: Core market volumes decreased 17.4% due to weather that was 18.9% warmer than the prior-year period; despite lower volumes, total margin only decreased slightly due to the increase in base rates
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