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Fortis, Inc. (FTS) Q2 2024 Earnings Call Transcript

AInvestThursday, Aug 1, 2024 4:23 pm ET
2min read

Fortis Inc. recently held its second quarter 2024 earnings conference call, where company executives provided insights into their operational performance, financial results, and strategic initiatives. The call, led by Vice President of Investor Relations, Stephanie Amaimo, featured updates from President and CEO, David Hutchens, Executive Vice President and CFO, Jocelyn Perry, and CEOs from certain subsidiaries.

Operational Highlights

Operationally, Fortis reported reliable service to its customers despite severe weather conditions, investing approximately $2.3 billion in capital projects focused on system reliability, customer growth, and cleaner energy initiatives. Notably, the Iowa Supreme Court granted a stay of the injunction issued by the Iowa District Court for Tranche 1 projects, allowing ITC to advance construction of critical transmission infrastructure for the clean energy transition and load growth in the region.

Financial Performance

Financially, Fortis reported a second quarter EPS of $0.67, a $0.05 increase from the previous year. The company's capital plan of $4.8 billion remains on track, with the completion of the 1,800 kilometer Wataynikaneyap Power Transmission Project in British Columbia, which is a majority-owned project by 24 First Nations and reduces greenhouse gas emissions in remote locations.

Regulatory Developments

Regarding regulatory proceedings, Fortis made progress on key projects, including the issuance of a Federal Environmental Assessment Certificate for the Tilbury Marine Jetty project in British Columbia, supporting the expansion of Fortis, BC's Tilbury LNG facility. Additionally, MISO released a near-final map of its LRTP Tranche 2.1 projects, indicating a need for additional transmission investments in the Midwest to support decarbonization and load growth trends.

Strategic Initiatives

Fortis continues to focus on expanding and extending growth opportunities, particularly in clean energy, continued electrification, and load growth. With a strong track record of increasing dividends for the past 50 consecutive years and a low-risk growth strategy, Fortis remains confident in its 4% to 6% annual dividend growth guidance through 2028.

Shareholder and Investor Interactions

During the Q&A session, key shareholders and investors asked about the impact of load growth on electric and gas utilities and the company's approach to sharing transmission costs. Fortis executives emphasized the need for load growth to pay for itself and expected a positive impact on customer affordability. They also discussed the ongoing regulatory process in Arizona and the potential for using formulaic rates or forward-looking test years to reduce regulatory lag.

Sectoral Trends

Fortis' earnings call transcript provides valuable insights into sectoral trends, particularly in the utility and transmission industries. The company's focus on system reliability, cleaner energy investments, and regulatory proceedings highlights the broader dynamics and opportunities within the sector.

Conclusion

Fortis' second quarter 2024 earnings call underscores the company's operational and financial strength, strategic initiatives, and regulatory progress. The company's focus on clean energy, load growth, and customer affordability aligns with broader industry trends, positioning Fortis for continued growth and success in the regulated transmission and distribution sector.

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