UGI Reports Strong Third Quarter Results

UGI Corporation

VALLEY FORGE, PA — UGI Corporation (NYSE: UGI) recently reported financial results for the fiscal quarter ended June 30, 2021.

  • Q3 GAAP diluted earnings per share (“EPS”) of $0.71 and adjusted diluted EPS of $0.13 compared to GAAP diluted EPS of $0.41 and adjusted diluted EPS of $0.08 in the prior-year period.
  • Year-to-date GAAP diluted EPS of $4.48 and adjusted diluted EPS of $3.30 compared to GAAP diluted EPS of $2.49 and adjusted diluted EPS of $2.81 in the prior-year period.
  • Q3 reportable segments earnings before interest expense and income taxes1 (“EBIT”) of $98 million compared to $81 million in the prior-year period.
  • Strong results from our diversified business led by increased total margins at UGI International in comparison to the prior-year period and new base rates at UGI Utilities that went into effect on January 1, 2021.
  • Completed another key milestone in the regulatory approval process related to the pending Mountaineer acquisition. The process is progressing well and the Company anticipates that the acquisition could potentially close as early as this fiscal year.

ESG HIGHLIGHTS

  • On May 14, 2021, UGI released its third ESG report and announced a commitment to reduce Scope I GHG Emissions by 55% by 2025.
  • On May 17, 2021, UGI announced that UGI International and SHV Energy intend to launch a joint venture to advance the production and use of Renewable Dimethyl Ether (“rDME”) in the LPG industry.
  • On May 19, 2021, UGI announced that its President and CEO signed the CEO Action for Diversity & Inclusion™ pledge, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace.
  • On August 4, 2021, UGI announced that Energy Services entered into definitive agreements to develop innovative food waste digester projects to produce RNG in Ohio and Kentucky, through its investment in Hamilton RNG.
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“UGI delivered strong third quarter results with GAAP diluted EPS of $0.71 and adjusted diluted EPS of $0.13,” said Roger Perreault, President and Chief Executive Officer of UGI Corporation. “This performance was driven by higher total margins at UGI International primarily due to significantly colder than prior-year weather, new base rates in our Gas Utility that went into effect on January 1st, and execution on our key priorities, including our growth investments and business transformation initiatives. As a result of the strong year-to-date performance, we now expect the full year adjusted diluted EPS to be at the upper end of our guidance range of $2.90 – $3.002 for this fiscal year.

“Our businesses progressed well on several growth initiatives during the quarter. UGI Utilities continues to see solid customer growth and is on track to deliver compound annual rate base growth in line with historical trends, through the record capital expenditure plan. In connection with the pending acquisition of Mountaineer Gas, the largest gas distribution company in West Virginia, we filed a unanimous settlement before the Public Service Commission of West Virginia. We provided testimony in a hearing before the Commission and expect to file a Proposed Order by August 10th. While the precise timing of the Commission’s approval is uncertain, we have completed several key steps in the regulatory approval process and now expect to close well before the end of the calendar year, and even potentially within this fiscal year. The transaction remains accretive to earnings in the first full year of operation.

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“UGI continues to execute on the renewables strategy that we discussed during the June 2021 Investor Day. Today, we announced that UGI Energy Services entered into definitive agreements to produce renewable natural gas in Ohio and Kentucky, through the Hamilton RNG joint venture. This project aligns with our renewables strategy and our goal of providing affordable, reliable and sustainable energy solutions to our customers. Our teams continue to explore an exciting range of renewables opportunities with strong return profiles in the US and Europe.

“We remain focused on execution and are confident that the company is well positioned to deliver another strong year of financial performance. We are excited about the opportunities ahead and are committed to maintaining the proven track record of delivering on our financial and strategic commitments.”

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KEY DRIVERS OF THIRD QUARTER RESULTS

  • AmeriGas: National accounts volume increased 18%; lower total margin was primarily due to a decrease in cylinder exchange volumes as sales normalized after the higher pandemic volumes seen in Q3 FY20 resulting in slightly lower average retail unit margins
  • UGI International: Retail volume increased 21% on weather that was 54.7% colder than the prior-year period; Q3 FY21 EBIT of $41 million compared to $21 million in the prior-year period
  • Midstream & Marketing: Higher EBIT reflecting equity income from the investment in Pine Run; Q3 FY21 EBIT of $21 million compared to $20 million in the prior-year period
  • UGI Utilities: Higher EBIT largely driven by the increase in base rates, higher margin from large delivery service customers and customer growth

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