RGC Resources (RGCO) 5 Dec 242024 Q4 Earnings call transcript

Good morning from a cold and blustery run at Virginia. I want to thank you for joining us as we discuss RGC Resources 2024 Fourth quarter and full year results. I am Tommy Oliver, Senior Vice President, Regulatory and External Affairs for RGC Resources, Inc. I am joined this morning by Founder, President and CEO of RGC Resources and Tim Mulvaney, our Vice President, Treasurer and Chief Financial Officer.

Before we get started, I want to review a few administrative items.

We have muted all lines and asked that all participants remain muted. remarks, presentation of on the our the and today's Financial Investor conclusion to questions. presentation page take Information website our link is the available and of The will we at www.rgcresources.com. At

So let's presentation and statements and Slide filings. Slide projections. of that risks contains X. should has agenda. about in including X contains our the information context forecasts X uncertainties, to turn Slide This forward-looking be our understood public

update operational fiscal allotted and year rate financial discuss We of will an activities, finished our with for and including we the discuss end. the XXXX regulatory other time our at fiscal XXXX full case highlights, then questions outlook how for and

front. We favorable on to routine matters number decisions Slide regulatory received of We a moving the busy X. regulatory fourth fiscal quarter. in a commission So the had year on

in of settlement believe the the enabled year-end. rate In increase is year. and this of commission, reflect is settlement the with we million of final revenue We annual is a this of to settlement the commission, in before results. The an hearing in an allows subject after us to our X.X%. addition, just to SEC November of by This staff, approval fair of place the in year-end general which in reflective outcome, reach our pleased effect early we ROE staff of estimated for are reached case and agreement $X.XX this advance took which the

reached years. staff are depreciation new in in which the updated new approval agreement a we customers refund quarter. remit small rates every Early and second We receive quarter, commission -- our X on the with final expect to a to fourth fiscal

these on both Additionally, in and with RNG X, annual our riders. The began we October XXXX. associated revenues received riders Save September, approval

of the connected renewals XX year Turning new services X. X extensions XXXX increase we and operations an XXX over period. the for now on prior Slide miles, and Main nearly new services fiscal to totaled

In that renewed during XXX addition, we services same period.

continue rate lower reliable distribution for system the X% to safe volumes we gas fourth delivered of customer warm full including Volumes volumes discuss compared As the overall commercial invest to we quarter. the with temporary gas to in XXXX a commercial ensure a September. Slide to the and decline shutdown fall shows were for base attributable X later, in customers. Slide quarter XXXX. volumes, our for X our will weather at delivered shows in fiscal a large year and lower

to will compared to turn As shown, it now remained I over CapEx period. last results. to our have total XXXX steady year's volumes and Tim talk Tim? about

you, Tommy. Thank

to Slide X. on Moving

spent fiscal we year. million fiscal Our spending million for The the the million more related in in to the to XXXX than XXXX totaled capital RNG facility. $X full decrease to $XX.X $XX.X attributable is prior compared

will XX addition expansion In first investments our interconnects our we on movement to some service of expanding our in Franklin X top to one significant our a for County. Paul initiated work, additional with as meaningful made customer and provide he MVP, typical completed and the customers discusses our system, Franklin to XXXX. renewing and County finished color

We in Moving earnings Slide released to mid-November. X.

the net level per interest a noted, or share same we of from investment income along quarter share reflects XXXX. including compared basis share earnings floating AFUDC lower to higher we $XXX,XXX found can lower on increased down $X.XX the $X compared per compared $XXX,XXX ago, website. This the rate difference pretax, net million which Roanoke environment, year the construction a MVP favorable of unconsolidated in driven our our the Gas of of in the is $X.XX impacting which that Interest fourth the be a in credit. our of to that interest due on pipeline $XXX,XXX quarter affiliates line to supports was which higher earnings investor report, debt As during was resulted our by Mountain phase. discussed to with amortization income results, of our rate the in MVP's Valley detail and was in the same quarter $XXX,XXX or the year and to Equity our expense costs, investment quarter in September in compared ago, XXXX. Fourth

to XX. company numbers equity million or per experienced or compared $X.XX fiscal grew share fiscal interest year-to-date Slide XXXX. to and completion strong also XXXX, the of rate on cost headwinds able was pressures per other the the in also growth $XXX,XXX but of overcome affiliate with the income. The The inflationary those net income earlier settlement $X.XX higher share In as to are we and $XX.X $XX.X The by marked discussed MVP million presentation. in in Tommy with the rates and was earnings by from case year

take what the line XXXX, to to capital, expectations Paul? Nester. through growth, to presentation how X. year for expect bottom us the Turning for be Slide the we into to Paul will EPS. of I the to our including pass is settles that going drivers and and Paul all now

Tim. you, Good Thank morning.

opportunities Valley up We accelerate now transporting just is dekatherms capability a that Pipeline literally are billion has X service day. Valley passing let's that's And and of territory. energy a Mountain to moment the take operational. of through on of Slide to our tremendous our discuss amount XX, believe right the Mountain that's we to some a growth

picture. we've many that spoken availability. And capacity about energy as transportation about we're years the and that that now excited for That's big

territory that into continue maybe see system, we growth. let's housing and our So from our strong to distribution where service down drill

neighborhoods, for new our planning similar Tommy the customer moments service breaking construction be in just particular. several of ago. moving residential to from ground space. number reviewed few got XXXX, the a or see We've a we additions connections new And

we're that. So excited about

for Roanoke be adjacent in nearing is The we Carillion a completion, be customer build-out which about we've is what the gas Vicinity. that downtown several usage for expansion steady or large expect Carillion. the years primarily to to and continues already is downtown that top There in complex, increased medical been talking X in just

we You support to we on implemented for And a year. complex, future another betterment medical may that million plans this system based $X $X plan betterment this have million at expansion. the recall system

did Tim are As we first gas serve now serving SummitView mentioned, Park. or the Business to in our customer

gas county Franklin actively opportunities development there. Valley we're in And available that regional partnership business is Mountain County, development, discussions the with about economic the and Pipeline in Roanoke now

We right Rocky that Mount are area Franklin distribution with [indiscernible] system. serve with SummitView the to Park from and we're the in Rocky interconnect -- new nearby to a Valley Town Pipeline, also County commercial expand conversation undergoing to And residential customers. Mountain now plans and County

excited. very So

had As in in and having the community. opportunity the meetings, for we've that to and this County point has opportunity Franklin investor about We're serve talked not natural with time. to thrilled to gas past be them calls working

of some work key though, accelerated action at note, conversations Mountain a and to those planning level, And Just conversations with in that decision require following we've the local government had makers. Valley does June. live and we've go

some positioned here, available. a within approved control And to completely or are forward caution they are these may as opportunities move our time. not But take little and just our company is

Moving on to Slide XX.

with Tim is for in capital for XXXX Our line XXXX. plan reviewed of spending fiscal what $XX.X million

system We in here existing Valley. continue continue to to the to invest greater -- expect in distribution Roanoke our

are allocated which there capital As the in pie talked with the shown some opportunities of MVP purple just about, Franklin we've there growth. we County labeled in part

also addressing now the about item We've the if Moving you in still and little that least seeing been interest to is noted, inflation our fiscal we covered election. other of popular are statement. environment? hopeful to tempers the what Slide down, moving drivers tempers we're the believe rate are this drivers. expense Tommy XXXX. And there's at some to The Tim, our area XX. influence outstanding of primary mentioned, in IT be the in all and around, seeing that. and economy, certainly very that, you are We're hearing will, our rates, with Tim an since performance and going inflation, that we expenses and a think costs. Interest we with fiscal labor and we're November side in the to going as flux prudent regulatory in year mindful making And of that the income of press as folks lenders rate that professional particularly and much services the from are course, is bit, continue

still The favorable year a it's where Sure. ago. directionally, -- ago, posture. year rising a was was it A to in it

murky in more from it consensus points you November, September, into more basis basis election a is now. seems it came we probably December, the September, as favorable XX basis then a Fed dropped than general having XX points passed, gets bit in points rates XX mentioned. little The and was there be in with to As it

XXXX, in think there's happen there's I a to -- consensus. don't going What's

little So the what bit look how as as is term. to right well will is inflation with Fed that now, doing Fed the and long of the evaluating a like election, the I think in look there's see

So.

expense we a obviously. in impact And impact line. Again, have be Yes. happens interest XXXX XXXX. still parts there, you, an Tim there's it Tim. Thank debt by in will interest influenced about Again, pieces with Thank moving what rate some of you. lot does rates. floating have talked to and bottom that our

lower in than the XXXX contribution from we Tim XXXX. on mentioned last do laden to Midstream, that the project. #X, be construction completed RGC to Midstream. earnings RGC Bullet being we modest will due year expect had the AFUDC It earnings a

year we midstream we of October received we receiving $XXX,XXX. for really forward? to going what think in good moment And an potentially you this I the watershed October from news be distribution a That XXXX. to is going add venture. our joint there are started in fact, of Tim, want the about anything that see investment approximately and first we cash in was

year. we're to -- for total Midstream, more So on in yes, have million flowing $X.X That's this work. the $XXX,XXX at quarterly that the of moment. time. September description X a get there going are at a the the we cash RGC excited best contributions we how And of for this our estimate estimate is our to good how investment direction will accounting deck the But very probably

believe on in XXXX, just the slide, will of of north cash. indicated we've million we be that $X And

increase success annually. more of an dividend to dividend operations, we under the the we outstanding normal announced utility. ago believe relative pleased just what X% the had especially few to able regulated to $X.XX resume Finally, just We're our that is approved growth a of we're that days annual Board our

nearing with And Slide for just per the and we more We the XX. end we in forecasted do be payout as about $X.XX this just right Valley to just may implied our But expect annual service to ratio. we range specifically. forecast County XXXX to on in and to we a and QX within moving other our today off think the believe potential zone our share rate physical $X.XX have grow our earnings, summarize we'll optimistic say to generally. that modestly, certainly XXXX. fits comments And territory, there. of of the Franklin our territory that opportunities we all comfort just can moment in that, see $X.XX Again, then be With our fiscal service we're has the earnings growth Roanoke our continue of range. I the company

and yet our again. a success. year, contributing it's our our customers we it I to natural, had time want the and and thank employees and other will at outstanding partners that think XXXX. reflect year, to an our I of business shareholders year great this were have really back the had on We've calendar And

our That remarks. concludes [Operator prepared Instructions]

doing you're Mike, hope good well? morning. We

are see what's And here MVP. previous I'm well gentlemen days. that question wondering the I of for into next looking are extended cold now right leads and given over had they're of like doing what we've given flows am. this I the you what weather couple kind my calling with the snap.

process as that answer only daily I see Yes, from through we that's public I'll Mike, answer I can we unofficially. what nominate and think And our somewhat question, volumes. nomination gas the good a can

Eastern if I which would will, I Seaboard. temperatures pipe full, what with mostly one are think in the expect greater you the the Mid-Atlantic in is the think area

it's it's X.X -- X believe Bcf I day. to between So a

Okay. next that my roll right And into question. will

by election from look the standpoint, little that, better that we're on and like And may up here little speeding post be process any they mean things going perhaps a So an the infrastructure with changes a bit. I expansion? now

wisdom interest Yes. rates a think, is as It your ties and Tim the on bouncing I relates discussion. to before to interest election, question, alluded back that around. wisdom the There prevailing rate was to,

when January Energy years Certainly, energy if to Trump, nominations takes about X Mike, based his certainly the you think similar. in energy position, for and some I policy environmental-related will, office of bullishness, be term. there President-elect and seems on and mid-late of he his a is next with America's

believe demand. And market How venture case, to a over only natural be the for and conjecture point. just there to gas, demand believes, can day potential it end be we expansion, somewhere think Again, will that do to new here, this the our sufficient drive there of for translates we're in speaking has but that I company time. pipeline At demand that it's we the believe, MVP joint be expansion the to pipeline the not expansion at or favorable. this

our exact of is your year have may question, with from So that, unknown, next still the different or EQT -- answer. least precise to a seat, be the at more timing slightly

one. Then Okay. last

are Assuming et Southgate, expansions, cetera. there

the your coming that thought and in be flowing is just cash the cash would your reinvested from in the direction, take MVP Now expansions? to that's

Yes, to Tim, do you that? answer want

Sure.

So Mike, some that our we debt you're supports have investment. as aware,

costs with, there And bit begin but so to do. rates depending our of on interest cover little there a excess we're to going interest is

do opportunities, with We Southgate. the both have and/or compression

investments closely see very other will looking be [indiscernible] the kind off pipe enhance those we'll cash so as coming opportunities the opportunities of And we at some that with as well that flow

Mike. Thank we other have call being Thank questions? Instructions] [Operator today. for you, Do any the on you

Winter me? Tim with hear Paul, Funds. this you Can is Gabelli

can, I Tim.

One the rate rate is the simple. Roanoke number questions. a What base couple for of had contemplated I order?

to that? Tommy, you add want to Sure.

then The the rate base. million, and rate was rate rate-based $XXX same some order, base RNG around we've got

million, So that a $XXX total range. of maybe to $XXX million

we're rate Net right at. -- base,

rate Net yes. base,

out deferred a don't of those take the that return. depreciation, items You depreciation, earn tax accumulated and some

Okay.

it wondering just number end written you've to And would like a as base your to considerations then Okay. your be holding What valuable interested Valley, know as versus it? would party and sure well. buying it's is on Mountain in I'm selling bigger down. I from the others if the there pipeline, be interest, what there? to were And that be rate extremely I'm it

Yes, Tim.

considerations. tax Significant

reminder with and does call, in what what those to it a tax did -- at on that's there question, And Yes, XX% a of great end, a the as especially the the impair you we have the XXXX. complicated answer, considerations. investment added just approximately our

added million RGC So some of Tim? million. in at of Midstream investment. subsidiary earnings AFUDC sound investment is or the Does balance I the sheet has approximately And cash to our approximately pipeline, construction sheet $XX our contributed the we, believe that balance Tim. right, had course, to $XX that have equity today,

correct. That's

assets, believe, is Thank and the low the Yes, very equity recent after of It is comment relative your good impairment earnings, so with million. $XX and it a you, Kelsey. a the very there. the we value number to

asset, because the a loss, So we noncash a is do with more little reported transaction again, tax we complicated assets, a are is, of think to were yes, if an answer the there if item the But all there should course be consequences. It to team to short with as about, we management you right? the our respect that of it's will, as impairment. that of

I'm sheet. value actual we if ... that is and value, have on that answered of our certainly but if What not you the market question, fair any balance your asset the will, sure

forward? it. more needs you're appreciate thinking got How you mic. about... I equity little then a just about No, And your talk That's Can bit much one I the since helpful. very going

if well add in the we capitalized Tim. feel little can a they and And then I utility. utility. bit talk the the Tim you But like, maybe, Tommy, would at we're regulated Sure. and that may like Tommy equity regulated to about certainly, let with start structure

Sure.

commission out contained coming case, fair that's Just equity. about I structure equity. balance the of the reasonable think And that of capital rate a and approved XX%

uptick to utility. at And size. XX% with certainly, the like X.X% for we utility layer ROE, equity our especially the Yes, that the

Correct.

It's Maybe different made about a Tim I of we're back got it about talk flip debt debt. little how -- structure. some comments and bit some capital thinking RGC Tim a in some Midstream. made about our may can Tim comments Mulvaney that

to Winter, from question there. back your holding equity Tim at company we'll And about come the

So.

Sure.

debt do midstream that that have have of fiscal the None it. level, made. amortization the of at supports debt investments we So is new. coming debt do we due none in have We that is of that $XXX,XXX But XXXX. coming on

on other what operational. capital banks with structure and working now long-term we're partners that the pipe the So is

one matures. that at 'XX We have fiscal midstream both run-up gas from tranche parts, and then in do several

started have already at point. don't we're this at report to We've that. So right conversations, we those looking but anything

that's And or Yes, environment, would in be back debt, interest interest if some circle bit see we we comes could right. little longer in rate subsidiary some rate the so term impact that full on debt. this environment, go lower Gas, to out the Roanoke a it's certainly, Midstream RGC some happy to actually of whether

to plans very market say, always But light on equity conditions. our business Tim, moment. capital those and at and have monitoring that earnings share our conditions XXXX doesn't conditions, it. that a could we're large equity change estimate All built into infusion are for per Again, the based

have other Instructions] questions? any [Operator Do we

for else see a to moment a has just if pause more We'll anyone question.

thanks successful. conclude help and does today. Well, us Okay. partners XXXX with to shareholders again, like customers business fourth employees and our to thank call. earnings being company so for hearing special just again I quarter make this our this none, and And fiscal you would a who

we and a XXXX And first very results. February at company, Gas holding again in quarter happy this you. Thank of you Resources Roanoke new a from forward to Christmas RGC certainly we of us and discuss the year, and look to call here merry all wish