icon
icon
icon
icon
Upgrade
icon

Black Hills (BKH) 7 Nov 24 2024 Q3 Earnings call transcript

AInvestThursday, Nov 7, 2024 8:20 pm ET
2min read

In the recent earnings call, Black Hills Corporation, a leading energy company, provided updates on its strategic initiatives and financial performance for the third quarter of 2024. The call was led by Linn Evans, President and CEO, Kimberly Nooney, Senior Vice President and CFO, and Marne Jones, Senior Vice President, Utilities, with a focus on customer-oriented strategies and growth opportunities.

Customer-Focused Strategy and Operational Excellence

The company reported excellent service delivery to its customers, maintaining a high level of reliability even amidst unplanned generation outages. Black Hills Corporation's commitment to providing safe and reliable energy delivery was evident, with 98% availability for natural gas units and 95% total availability across its generation facilities. This focus on reliability is not only essential for meeting customer needs but also plays a crucial role in attracting new customers to the service territories.

Strategic Growth Opportunities and Capital Investments

Black Hills Corporation announced its plans to serve Meta's first data center in Cheyenne, Wyoming, starting in the 2026 time frame. This strategic move is part of the company's capital-light model to capitalize on the growing demand for hyperscale data centers. The company remains on track with its $800 million capital plan for the year, highlighting its commitment to delivering upon its customer-focused growth initiatives.

The company's ongoing capital investment plan is critical to delivering on its financial commitments and enhancing the resiliency and capacity of its regional energy infrastructure. Notably, the Ready Wyoming electric transmission expansion project is expected to be completed by the end of 2025, benefiting customers with cost stability and expanded energy market access.

Financial Performance and Outlook

The company reported financial results in line with expectations, with key financing activities completed and a net debt to capitalization target of 55% achieved. Black Hills Corporation is on track to deliver on its earnings guidance range of $3.80 to $4 per share for the year. Despite mild weather and unplanned generation outages, the company's strong margin growth and prudent expense management have enabled it to achieve its financial objectives.

Looking ahead, the company remains confident in achieving its long-term 4% to 6% EPS growth target. The five-year capital investment plan anticipates investing $4.3 billion, with a focus on generation investments and expanding opportunities as market conditions evolve. The company is expected to provide its 2025 earnings guidance and an updated capital forecast through 2029 in February.

Regulatory Initiatives and Wildfire Management

Black Hills Corporation has made significant progress in its regulatory initiatives, with approvals of new customer rates in Arkansas and a settlement for its rate review request in Iowa. The company continues to pursue its Colorado Clean Energy plan, anticipating a final written commission decision before year-end. Moreover, the company's wildfire management and risk mitigation plans have been successful in reducing risk and enhancing operational response.

Conclusion

Black Hills Corporation's earnings call highlights its strategic focus on customer-oriented initiatives and capital investment plans. The company's operational excellence, commitment to reliability, and strategic growth opportunities position it well for future success. With a solid financial position and a clear vision for the future, Black Hills Corporation is poised to continue delivering value for its customers and shareholders.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.