MDU Resources Group held its second quarter 2024 earnings call, highlighting the company's financial performance and strategic direction. The call, led by Vice President, Chief Financial Officer, and Treasurer Jason Vollmer, featured detailed insights into the company's financial health and growth prospects.
Financial Highlights
MDU Resources reported a GAAP net income of $60.4 million, or $0.30 per share, for the second quarter of 2024. This marked a significant decrease from the previous year's earnings of $130.7 million, or $0.64 per share. However, when excluding the impact of the Knife River spin-off, adjusted income from continuing operations stood at $65.2 million, or $0.32 per share, showcasing a more positive financial trend.
Utility Business
The utility business reported earnings of $10.5 million for the quarter, reflecting a decrease from the previous year's earnings of $13.1 million. The decrease was attributed to lower volumes from customers and higher operational maintenance expenses. However, strategic rate relief measures helped offset some of these challenges, underscoring the company's focus on maintaining reliable and efficient electric and natural gas services for its growing customer base.
Pipeline Business
The pipeline segment achieved record second quarter earnings, nearly doubling compared to the same period last year. This growth was driven by record-breaking transportation volumes and increased storage revenues, reflecting the company's strategic expansion efforts and strong demand for its services.
Everus
Everus, the construction services business, reported record second quarter earnings and an all-time record backlog of projects. The company is on track for a spin-off later this year, with a focus on capitalizing on increased demand for its services from data center construction and the infrastructure investment and Jobs Act.
Future Outlook
MDU Resources remains confident in its long-term growth prospects, projecting a compound annual growth rate of 7% on its utility rate base and an anticipated customer growth of 1% to 2% annually. The company also expects to achieve long-term EPS growth of 6% to 8%, with a targeted dividend payout ratio of 60% to 70% and no anticipated equity needs until 2027.
Conclusion
MDU Resources Group's second quarter 2024 earnings call provided valuable insights into the company's financial health and strategic direction. Despite facing challenges in certain areas, the company's focus on growth and strategic expansion, particularly in the utility and pipeline businesses and the upcoming spin-off of Everus, positions it well for the future. As the company moves towards the spin-off of Everus and continues to navigate the evolving energy landscape, investors and stakeholders will keenly watch its progress.