UGI Reports Second Quarter Results and Updates Fiscal 2022 Guidance

UGI Corporation

VALLEY FORGE, PA — UGI Corporation (NYSE: UGI) recently reported financial results for the fiscal quarter ended March 31, 2022.

  • Q2 GAAP diluted earnings per share (“EPS”) of $4.32 and adjusted diluted EPS of $1.91 compared to GAAP diluted EPS of $2.33 and adjusted diluted EPS of $1.99 in the prior-year period.
  • Year-to-date GAAP diluted EPS of $3.87 and adjusted diluted EPS of $2.84 compared to GAAP diluted EPS of $3.77 and adjusted diluted EPS of $3.17 in the prior-year period.
  • Q2 reportable segments earnings before interest expense and income taxes1 (“EBIT”) of $631 million compared to $630 million in the prior-year period.
  • Strong balance sheet with available liquidity of approximately $1.9 billion as of March 31, 2022.
  • On May 4, 2022, UGI’s Board of Directors approved an increase to its quarterly dividend to $0.36 per share marking the 35th consecutive year of annual dividend increases.
  • Updated Fiscal 2022 adjusted EPS guidance to a range of $2.90 – $3.002 per share.

“Despite ongoing macro-economic headwinds and the current geopolitical environment, our business demonstrated tremendous resiliency during the fiscal second quarter to deliver adjusted EBIT for our reportable segments of $631 million, which was fairly consistent with the prior fiscal year,” said Roger Perreault, President and Chief Executive Officer of UGI Corporation. “Our natural gas businesses delivered strong results which reflected incremental earnings from Mountaineer and higher base rates at UGI Utilities. Higher LPG margins and disciplined expense control actions throughout the business partially offset the decline in energy marketing margin at UGI International and lower volumes at AmeriGas, largely stemming from customer service challenges experienced in the prior year and increased price sensitivity in the higher commodity cost environment.

“Given the fiscal year to date performance, we expect adjusted EPS for fiscal 2022 to be within a revised guidance range of $2.90 to $3.00. Our teams have implemented margin management and expense control actions which are expected to provide incremental benefits for the remainder of the fiscal year, significantly changing our fiscal 2022 earnings profile for the back half of the year when compared to our historical trend.

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“We are focused on our strategy to deliver reliable earnings growth, invest in renewables and rebalance our portfolio. With that in mind, we have initiated a strategic review of the energy marketing business at UGI International. Separately, our Utilities segment remains on track to achieve yet another record capital investment year.

“Looking forward, we are optimistic about the opportunities ahead and believe UGI is well-positioned to build increasing value and long-term growth for its shareholders.”

KEY DRIVERS OF SECOND QUARTER RESULTS

  • AmeriGas: Lower total margin due to 8% decline in retail volume; higher average LPG unit margins
  • UGI International: Higher LPG total margin due to margin management efforts; lower energy marketing margin due to significant increases and volatility in commodity prices
  • Midstream & Marketing: Total margin down $10 million, largely reflecting lower capacity management margin resulting from the timing of settlement of storage hedge contracts
  • Utilities: EBIT up $52 million, largely driven by incremental earnings from Mountaineer, higher base rates and benefits from the Distribution System Improvement Charge (DSIC) at UGI Utilities
  • Q2 GAAP diluted earnings per share (“EPS”) of $4.32 and adjusted diluted EPS of $1.91 compared to GAAP diluted EPS of $2.33 and adjusted diluted EPS of $1.99 in the prior-year period.
  • Year-to-date GAAP diluted EPS of $3.87 and adjusted diluted EPS of $2.84 compared to GAAP diluted EPS of $3.77 and adjusted diluted EPS of $3.17 in the prior-year period.
  • Q2 reportable segments earnings before interest expense and income taxes1 (“EBIT”) of $631 million compared to $630 million in the prior-year period.
  • Strong balance sheet with available liquidity of approximately $1.9 billion as of March 31, 2022.
  • On May 4, 2022, UGI’s Board of Directors approved an increase to its quarterly dividend to $0.36 per share marking the 35th consecutive year of annual dividend increases.
  • Updated Fiscal 2022 adjusted EPS guidance to a range of $2.90 – $3.002 per share.
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“Despite ongoing macro-economic headwinds and the current geopolitical environment, our business demonstrated tremendous resiliency during the fiscal second quarter to deliver adjusted EBIT for our reportable segments of $631 million, which was fairly consistent with the prior fiscal year,” said Roger Perreault, President and Chief Executive Officer of UGI Corporation. “Our natural gas businesses delivered strong results which reflected incremental earnings from Mountaineer and higher base rates at UGI Utilities. Higher LPG margins and disciplined expense control actions throughout the business partially offset the decline in energy marketing margin at UGI International and lower volumes at AmeriGas, largely stemming from customer service challenges experienced in the prior year and increased price sensitivity in the higher commodity cost environment.

“Given the fiscal year to date performance, we expect adjusted EPS for fiscal 2022 to be within a revised guidance range of $2.90 to $3.00. Our teams have implemented margin management and expense control actions which are expected to provide incremental benefits for the remainder of the fiscal year, significantly changing our fiscal 2022 earnings profile for the back half of the year when compared to our historical trend.

“We are focused on our strategy to deliver reliable earnings growth, invest in renewables and rebalance our portfolio. With that in mind, we have initiated a strategic review of the energy marketing business at UGI International. Separately, our Utilities segment remains on track to achieve yet another record capital investment year.

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“Looking forward, we are optimistic about the opportunities ahead and believe UGI is well-positioned to build increasing value and long-term growth for its shareholders.”

KEY DRIVERS OF SECOND QUARTER RESULTS

  • AmeriGas: Lower total margin due to 8% decline in retail volume; higher average LPG unit margins
  • UGI International: Higher LPG total margin due to margin management efforts; lower energy marketing margin due to significant increases and volatility in commodity prices
  • Midstream & Marketing: Total margin down $10 million, largely reflecting lower capacity management margin resulting from the timing of settlement of storage hedge contracts
  • Utilities: EBIT up $52 million, largely driven by incremental earnings from Mountaineer, higher base rates and benefits from the Distribution System Improvement Charge (DSIC) at UGI Utilities

UGI Corporation is a distributor and marketer of energy products and services. Through subsidiaries, UGI operates natural gas and electric utilities in Pennsylvania, natural gas utilities in West Virginia, distributes LPG both domestically (through AmeriGas) and internationally (through UGI International), manages midstream energy assets in Pennsylvania, Ohio, and West Virginia and electric generation assets in Pennsylvania, and engages in energy marketing, including renewable natural gas, in the Mid-Atlantic region of the United States and California, and internationally in France, Belgium, the Netherlands and the UK.

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