Atmos Energy (ATO) 7 Nov 24 2024 Q4 Earnings call transcript

In Atmos Energy Corporation's recent earnings call for the fiscal year ending in 2024, the company showcased its strategic growth and operational excellence through a series of impressive accomplishments and forward-looking plans. Led by its executives, Kevin Akers, President and CEO, and Chris Forsythe, Senior Vice President and CFO, Atmos Energy presented a compelling narrative of its financial health, growth prospects, and commitment to its customers and communities.

A Year of Significant Milestones and Customer Growth

Atmos Energy reported a robust fiscal year with earnings per share of $6.83, marking the 22nd consecutive year of earnings per share growth and the 40th consecutive year of dividend growth. The company's focus on operating safely and reliably while modernizing its natural gas distribution, transmission, and storage systems resulted in over $2.9 billion in capital investment. This investment supported the replacement of over 850 miles of distribution and transmission pipe and over 55,000 service lines, enhancing the safety, reliability, versatility, and supply diversification of its APT system.

The company's expansion efforts were reflected in its customer base, with the addition of over 59,000 new residential and commercial customers, including over 46,000 in Texas. The housing market in the DFW Metroplex remained strong, with record new home closings and robust job growth in the state, underscoring the vital role natural gas plays in economic development. Atmos Energy's customer support associates and service technicians received a 98% satisfaction rating from customers, further solidifying its commitment to exceptional service.

Strategic Investments and Future Plans

Looking ahead, Atmos Energy outlined a $24 billion capital investment plan for the next five years, focusing on the modernization of its systems and supporting the growing natural gas demand across its jurisdictions. The company's strategic investments in safety and reliability, along with its commitment to fortifying its system to support the growth of LDCs located behind its pipeline, underscore its position as a key player in the energy sector.

Financial Performance and Guidance

Chris Forsythe, CFO, provided a detailed analysis of Atmos Energy's financial performance and guidance for fiscal 2025. Excluding one-time benefits, earnings per share increased by 9.2%, reflecting the successful execution of its operating, regulatory, and financing strategies. Operating income increased by over $300 million, driven by strong customer growth, rising industrial load, and peak day demand requirements. The company's financial health was further underscored by its strong balance sheet, available liquidity, and regulatory mechanisms.

Challenges and Opportunities

Despite the positive outlook, Atmos Energy acknowledged the challenges posed by unplanned maintenance on pipelines and delays in new takeaway capacity coming online, leading to negative Waha pricing for 63% of the trading days. These market conditions underscore the importance of diversifying its supply sources and managing operational risks effectively.

Conclusion

Atmos Energy's fiscal 2024 earnings call provided a comprehensive overview of its strategic growth, operational excellence, and financial health. The company's commitment to safety, reliability, and customer satisfaction, coupled with its strategic investments and future plans, positions it well for continued growth and success in the evolving energy landscape. As the company navigates the challenges and opportunities ahead, it remains focused on delivering reliable and efficient natural gas to homes, businesses, and industries, ensuring its vital role in meeting energy needs now and into the future.