Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Chesapeake Utilities Second Quarter 2023 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Beth Cooper, Executive Vice President, Chief Financial Officer, Treasurer and Assistant Corporate Secretary. Please go ahead.

Beth Cooper

Thank you and good morning everyone. us Chesapeake joining XXXX second you call. earnings appreciate today Utilities' for quarter We

in release year and our Company saw first effects you As press into temperatures operating performance XXXX, the the both footprint. of in warmer delivered of issued in the our periods quarter the year-to-date half despite continued across solid the yesterday,

share of of Current quarter or on second gain quarter XXXX, recognized to pre-tax diluted $X.XX results also a per a exclude basis. in non-recurring the million amounting impact $X.X the

We will financial driving another and on the committed Chesapeake on in executing just results strategy delivering detail touch Utilities long-term in increased a year to but performance, growth more of shareholder record few value. minutes; its remains

today Officer; Chairman, and Corporate Risk As shown on Jim Slide and Secretary, X, and participating President, Jeff call and Chief President, are General Executive with Officer. Executive the Moriarty, Vice me Policy Counsel, Chief Householder, on

other can we and up us After our we have in questions. Events prepared management Presentation also on of open the the will Page do, for joining under as remarks, accessed website be our team members Investors We presentation typically subsection. Today's call virtually. our

X, conference involve that remind like would discussed in statements matters this Slide to risks to call Moving forward-looking I include uncertainties. may you that and

projections cause could our company's Form that XX-K XXXX to and our actual information forward-looking the of the results. results. statements materially factors actual statements could Forward-looking from differ for provides differ section The safe statements harbor such on from further

G. this gross in margin non-GAAP accordance with in provided has the gross based A Additionally, earnings Regulation release. the in and the adjusted provided is appendix evaluates appropriate on gross non-GAAP SEC's GAAP adjusted disclosures of our margin of reconciliation and presentation performance its to company the margin

drivers to Jeff remarks, turn and key on the second some to opening I'll the call our including of performance. the over company's provide quarter Now, Jeff?

Jeff Householder

call joining morning thank you today. Good Beth. you, for and our Thank

year-to-date the for second for share weather for of significant year-to-date. earnings Warmer a reporting second including $X.XX was XXXX a $X.XX the quarter We're per basis, on $X.XX and $X.XX quarter. impact,

share. weather of team looking continued acceleration, impact opportunities warm a we've for overcome million significant all margin Today, the to also mind dollars. and and the during rate recovered Despite gain $X.XX real gain transaction to related several went other hikes, cost in work interest that a prior non-recurring per savings, our in represented to $X.XX we per period an Keep estate recognized the XXXX. a share

and team far Despite XXXX, our dedication continue growth of the the the be fundamental thus Chesapeake successful. to driven challenges efforts during by strategy

adjusted investment second As we for way the our forward gross that for coming $X.X significant over have margins that several million a initiated result, to our years. energy over And and system paving margin projects several also We've substantial in new strong continued customer year's the initiatives finalized are increased regulatory services. meet investments adding by addition, demand delivery quarter. last the

total approximately first the $XX the year in million. under just half quarter, capital our to of during deployed we bringing investments, the During second new $XX spend million

capital XXXX of to communicated million. expenditure $XXX previously $XXX the support guidance to continue We range million

continued of pipeline newest the investment week, expansion to Florida example to approval gas growth an our this Public for Florida. Service As have of city Commission our we bring received opportunities, Newberry,

margin Beachside the We Lake completed pipeline also and recognize projects, recently began two to from expansions. Wales

Delmarva Wildlight Eastern we the will expansion the Shore and including Expansion development in Florida, gas underway, are projects on highlight an Nassau which County, in natural Southern later. other Numerous

PSC our replacement Florida the to which in addition the phase Newberry approved recently GUARD the second is program program, pipeline of our expansion, In comprehensive Florida.

us later customer the premises. a GUARD to the mains locations street details replace provide through little rear front our distribution upgrade also easements, will the in improved systems to located side Jim us more in and program GUARD system the allow on facilities, for in safety and Florida will and of deliverability call. the relocation of It other enable will

Our volumetric impact other well in presented economic weather growth pressures the earnings cost overcoming mentioned long-term initiatives as non-recurring the of have the current most to effect of provided by the and serve foundation previously of environment, an that as XXXX. the gain offset

While weather regards another at or it a has expectations, distraction, tempered year been has in performance. our strong achieving damped of not to

volumes Slide for periods. to additional color and given year-to-date impact significant on provide wanted some we the On X, weather, its quarter on

As each temperatures compared the area, year to territories XX were that warmer of were first last and just the to levels. In compared XX% were lower six to months warmer, unseasonably the service last XX% service of normal see, you degree-days experienced to our but years. compared compared XXXX heating can lower notably primary not Delmarva

Ohio, XX-year by and overcome certainly with These growth and a In in on lower the the over as we're big focused Again, in cost while temperatures colder the the focus to job as a these restore possible be initiatives not temperatures more levels, XX% efforts remainder down by Degree-Days also will team year year XX% efforts. warmer excellent and help. of heat continue of Significantly later mitigation XX% and our earnings. year-over-year as were year-to-date in remaining normal load these XXXX did would temperatures Heating Florida, an than And much through respectively. were than normal comparisons. on to dependent the

growth Slide let some on key drivers. me to X, Turning provide our updates

to gas natural distribution to in the continue select service we of organic experience Delmarva both outpaces growth their average across that gas natural choice. customers Florida as energy national our far and our preferred businesses First, territories, continue

and saw X% communities we This the nature X.X% to a our in a Florida. serve. continues of territories increase the highlight for attractive service Delmarva increase we quarter, the For

in runway of to growth areas we the continued two customer growth get rates, investment our of Middletown, distribution for our just the Given growth, businesses I County, our the Delaware in and customer many drive transmission Florida. we systems. additional questions to want growth continuing for of Wildlight is magnitude around the The in achieved highlight also the and the driving rates need Nassau magnitude

second for first time pipeline the in mentioned several generated I projects As the quarter. previously, of margin our

other We also major we and significant our headway to added deliver table growth expansion, to XXXX projects, and These continue others the including and will in this our projects margin make Newberry projects quarter. Wildlight project beyond. with

And in an while especially second Sharp margins propane warmer and northern did the temperatures job volumes service service in business our team managing into impacted quarter, fees, our territories. our excellent

in we secured we've growth where new community customer add gas available. the gas natural gas, continue to yet propane natural is not systems Beyond

component remains choice where customers energy our our desirable gas yet a is strategy. of growth highly core a natural not for available, As propane

Services the drive for growth Marlin to continues solid Gas company.

energy vertical our their transportation Florida including last solve compressed unique our natural services serves and solution, pipeline As is Marlin customers mentioned challenges, to gas clean station. complex service gas on our to call. we that vertical fueling in delivering Marlin's pipeline with that solution

and several and Dairy advance call, for renewable in a investment the renewable Full the our to the being disciplined on continue the the and in participation region. initiated and approach. we the at a regulatory that County, nature our our track Florida, natural markets institutions team, Finally, last constructs. that in of our sustainable natural Circle We're We've Hydrogen proposal we on and comprised into the Delaware, cautious farm first New half also Madison educational gas submitted go for in remain recognize XXXX. gas MACHX the projects. collective full-scale of commercial, discussed to we service Jersey first Hub unit Philadelphia, governmental, On of Southern facility on evolving We construction

these of About our ago the Energy, one development is in in energy several and, weeks further, work we that of proposed members with alongside is hub our multiple across hydrogen sustainable of some finalists, a We're a deployment for both excited XX Department our participated mission to team and it vying to supports an to interview funding more uses. future. partners with deliver

unveiled in and recognize of our future The the growth growth potential. footage showcasing demonstrates well current on the our and the service clearly received of some we May, territories that within we spend service territories in future to Florida. that Delmarva time our We runway provide. has been Back need areas and and service more footage drone

and Florida. one I'm in For that, in going area Delaware such to highlight one

last few a fast Delaware was high Best XX Families. ranked as developments, Housing of recently by the growth, Middletown, to U.S. built infrastructure nine Fortune.com pace; example, experiencing that commercial are in growth. many Fifth schools, only related levels at and the years. are These a continue areas the for out Talent for of being in the build the

States. was of This jobs. recently, the that the drive selected company's facility in a for hundreds will facility manufacturing town this pharmaceutical second new is United More

in sometime and plant As their XXXX. service for manufacturing the facility we gas their of begin natural will to operations, part provide the expectations process, to

While about will thousands comprise talk fundamentally scales need Amelia homes, to Jacksonville, beaches think over growth Wildlight at from residential Island we Located of of tend Wildlight. you comprising XX XX,XXX to years developments expected XX we and constructed the and next when maybe about the approximately mass to to be homes. is talk about hundreds,

and positioned to schools, Our additional distribution, medical growth the Pipeline constructed, to had surrounding so from system. distribution construct well residential facilities methane/natural as the customers including meet demand being facilities, as gas serve more. Peninsula the FPU system is distribution businesses, on also infrastructure commercial these many The to from

by to distribution highlight X, several to growth. system over it turn driven examples I of I Before Slide expansions Beth, pipeline wanted on

the skid Southern as quarter one gross that our the demand is to Southern basis in $X.X go Delaware. XXXX. into our natural Delmarva, expansion. facility at transportation additional On system distribution existing and compressor capacity in generate the such the We're significant new installing provide on will own adjusted in example of Bridgeville million gas an beginning annual a result growth will This margin a of service fourth support

Next, distribution the which Wildlight supports mentioned expansion recover I the preceding pace. system on pipeline just the growth

project $XX.X expansion the brings proposed pipeline expansion this in is Florida to town key Florida. Central natural which Another Newberry, gas of million

growth are incremental exploring would natural service. we're In gross margin current from other commercial once be addition add gas converting $X.X natural we annualized gas to fully that There and residential propane of service. our from to million will town adjusted beyond industrial capturing and commercial the in new customers, also which estimate opportunities

And more turn Beth? depth. discuss in over to our with that, to results call I'll Beth the

Beth Cooper

Jeff, again you, morning good Thank and everyone.

continue our I to things organization X, as we the Slide I'd relative accomplish an begin am peers. and of saying to to performance that like our proud by Turning to

second six provide months our additional results first Now, I'll and year. details the for on some the of quarter

quarter mentioned, real of Jeff estate, $X.XX. second related the impacted the and We the of during included that the weather gain prior to impact $X.XX impact. EPS which EPS $X.XX warmer diluted overcame compared the costs year cumulative the As $X.XX by interest was $X.XX, $X.XX for of $X.XX higher year, to of

effect more base by X% during fees respectively, gas both period and increased gross margin weather the and despite growth gross higher in and of growth natural our with renewable contributions quarter natural than and March income expansions, associated gas. pipeline The regulated in Adjusted the pipeline operating from rates the margin included business, prior-year per increased our new and key incremental for permanent virtual the contributions impacts. in our solutions propane gas went relative demand including new margin infrastructure that our into to programs, in and X%, shaping businesses, for factors natural organic distribution headquarter Florida gallon adjusted compressed

quarter, Consistent the with overall impacted by weather, the first during saw adjusted we that warmer offset was consumption partially gross the growth. margin which conditions our

our had has results. a However, more significant weather on on impact a basis, year-to-date

While throughout EPS $X.XX impact $X.XX team. during attributable results monumental of months significantly came to XXXX. during the current growth compared through our task to XXXX impact our of by was year, approximately year six experienced the at reflect the margin the prior of $X.XX Overcoming diluted warmer weather in $X.XX a this first a

continue operating On experienced impactful adjusted the half quarter more million the second rising the shows unfortunately, during was gross $X.X Interest quarter. current and second increased were rate and, expense into financial margin XX, $X.X almost XXXX. our the XX% for effects linger summary XXXX environment the as of to Slide increased million year during that during higher the income of

was XXXX to lower growth $X.XX initiatives the impact just more the and team, Again who strategic second This plan. importantly, our focused continues despite quarter second only resilience for highlight these year; quarter headwinds, the was performance long-term on continue of XX%. and a EPS on stay of our the year-to-date of to than last basis,

walk Moving provide for to let our quarter. insight Slide EPS additional me some XX, on the

As gain several we XXXX quarter to now related times, of per rationalization real share. estate mentioned the recognized of $X.XX in a second

previously increased growth. that margin Our share. weather, the core touched of $X.XX impact businesses, this We excluding per contributions on the of earnings provided drivers continued by additional key

continued through a to the than partially first volumes, for Although the this quarter. approximately weather offset $X.XX lesser representing reduced growth to quarter, degree

operating or gross core impact our adjusted Higher a XX% $X.XX expenses business margin. of to tied just drove

reflective been higher quarter cost had and everyone weather our this want remind been While averages, operating that management, of historical is would have with continued consistent on I for periods. focus year-to-date both the expenses to

incremental XX% tied amortization, particularly a have year. cumulative the property other quarter At a minimum, And, same and in depreciation, required in tax changes would expenses the volumes Higher to compared to resulted together businesses. volumes, impact such expense costs finally, increased interest incremental in an and propane $X.XX impact. resulted last

but walk a I are regard did year-to-date similar note provide what bridge key On to all I for primary the quarter, drivers won't details, covered so items. a to few we with to just Slide The XX, we our through want performance. the

increase period a largely absence the in This from rates. one-timed our offset asset decrease with the real includes First, to year-to-date the one a state associated prior year. serves related estate of the gain the of tax $X.XX to

much second per quarter the prior quarter first was along our with on impacted our to temperatures $X.XX impactful experienced the historic The weather of the continuation have temperatures year-to-date warmer results Second, into year. during performance. the by share relative more

the on XX%. $X.XX can cut core the impact into year-to-date see growth you of this contribution As per weather slide, share by business

further northern were drive generated than the that territories. prior long-term our dedication strategies This $X.XX that the approximately delivering warmer with are team the temperatures with X% year of will and of So, or demonstrates our we earnings. service in results fundamental growth said, within that EPS XXXX that XX% future

operating slides, next segments. Utilities' Moving to the two touch let Chesapeake me on

adjusted on up see year-over-year XX, margin X.X% can gross for segment. the was Energy X.X% you Regulated As our quarter for Slide and

rate and periods both distribution our program. organic by gas propane XX.X% respectively, was expansions CGS finally, Operating growth including our systems, our pipeline in rates rates, incremental natural contributions base associated proceedings, also higher double-digit new growth and Florida in up driven income by XX.X%, with infrastructure gas transmission conversions, from natural various and,

million in Turning Unregulated adjusted the and year-to-date constant was throughout temperatures warmer the operating and businesses the and level, At gross with million XX, segment are operating of decrease the and the significantly expenses $X.X period. the the X% experienced to those of for for a combination relatively year for prior-year quarter fixed Slide increased respectively. the resulted margin the that inherent quarter $X.X in periods, income

support As like our of our I'd track, our capital investment strong projections future, remain on on the balance capital as position. the highlight some strategic plan sheet continues details to to in strong

on XX-year just mentioned as the rate issued $XX in With debt to of been of reduce raising some we of notes shown and balance a the of able have short-term million last Slide continued million, us environment. quarter, borrowings that short-term allowed XX senior interest under we mitigate effects As $XX to the considerably. March

billion. utilizing the million of of for rates interest we end the This that At the X.X% capitalization long-term a included an XX.X% long-term period, debt I $XX months debt short-term executed swap just X.XX%, was of several total $X.XX average of and in at ago. locked equity, three-year fixed mentioned. debt, approximately We the stockholders' given the debt rate only short-term XX.X% balance, financing

discipline and over growth execute years. financing targets financial also our yielded quartile maintaining our will You the to have continue plans our XX-plus that performance while us top facilitate see that last

drive initiatives, and pipeline and gross margin Moving CNG, regulatory major growth transportation which including and this RNG adjusted highlight year to LNG, projects, next. Slide we XX, our projects, the our will strategic expansions,

does the that that projects evaluating is are not pursuing. organic we indicative not and this and all include growth always, we you of it As table remind

presented opportunities margin other initiatives in to to in business approximately our XXXX these announcing million encouraged with the development $XX projects and forward XXXX. team are continue be We the in additional that look are million by more and than add to Combining in $X.X expected future.

or or we projects new will them As table. this finalized, to are add initiatives announced

of constructed will we that projects pipeline margin projects million, $XX our completed. Moving XX, to to With the expected completed $XX investment gross well partially projects as of are be than more these and be key an as Slide contribute activity, increased in once approximately expansion year. highlight million this adjusted projects to level

pipeline diversity talented will to by together, of I innovation, said, investment our opportunities, stakeholders. Standing regulatory year-to-date. of that team the The our With year-over-year and performance. we industry-leading of our growth, and would committed finish a strong our acknowledging operations, for growth organic financial like earnings to achieving to track record efforts delivering continue remain long-standing drive workforce of performance increased our growth

pass now culture will update. the call our company discuss Jim? to and I Jim regulatory to

Jim Moriarty

Beth, and good you, with is to morning. great be Thank It you all.

of like recent highlight to regulatory first would I activities. our some

As the we many case simplify as was have Florida fronts, including on significant rate financially, to well of outcome already mentioned, as the business. serving our

was of The million should With recognize permanent a $XX.X to in in rates full close quarter you of XXXX projected effect. rates to expect with quarter XXXX, first second permanent year impact. the full margin the

the Building Maryland division our for for preparing Sandpiper rate we're we our XXXX off Energy. process filings. upcoming followed in and required to case We're file Maryland early Florida, in of a

approval regulatory on would I We provide a we from also these like program the lessons context earlier to Florida this PSC. as prepare and by to will of look more little filings. week the strategies around build the GUARD Florida, learned

million in million XX-year of forecast. As shown $XXX additional investment expected which capital XX, $X investment, XXXX, projected capital this of in reflected including program our is on Slide to represent is

our in margin million are Plan, capital which our by the demonstrate planned in like secondarily, requirements that meet maintaining For in approaches Eastern forecast Surcharge with contributing service the in to reflected margin $X.X we PHMSA and, long-term Storm infrastructure programs Protection $XX our Eastern result XXXX. projecting growth. Electric regulatory Shore's GUARD, investment, new of importance and play is Cost other plan, XXXX, of combined and million Shore Capital that our investments reliable safe our will to

Turning recent take minutes most to Slide our to also and XX, a few initiatives. highlight I sustainability reporting wanted

decrease new human our to risk on new initiatives, we an second published all data on quarter, we this fronts, second enhanced Sustainability the is our and safety including the tables. During XX% compared and covering our programs, report which Giving Report, emissions Within diversity management, multiple enterprise detail, disclosures reported without XXXX as and available website. and our capital our Policy, management of

to reports on media we report, summary sustainability In the multi-week milestones full prepared out inaugural social rolled also updates addition discussing our focus our sustainability. and highlight long-standing and continuing and since a and efforts key reflect These report. campaign

You Association culture foundational first securing about protecting organizational communities, safety. the culture. assets safeguarding most operating the safety Utilities speak people, commitment, heard vehicular three many have commitment outstanding companies and Public which heart earned AGA subsidiaries is and our Reflecting and safety. times given at that Shore to late our Eastern to earned Safety our the to commitment Company Chesapeake's Natural awards Award, American Achievement and Florida are demonstrate us and our employee is It imperative: of Company the Gas May. in Gas

by Health DART the Energy and Away; AGA Ohio industry local Administration to for Aspire is Days a Safety industry companies. metric Accident distribution injuries. than for measure achieving a the leader of in an rate, the workplace addition, In impact Prevention lower of is used Occupational DART Transferred, Restricted; average named which was

all closing with now be today, I to will some great Jeff you turn for was to call It back comments. the that, With

Jeff Householder

Thanks, Jim.

with of Capital for billion long-term support the Slide reaffirm million remain to to guidance that to period per this to to million $XXX share $XXX we $X.X XXXX our $XXX our capital year's guidance to million. in XX, of to earnings $X.XX I on $X.XX guidance continues want and expectations for XXXX track both Turning XXXX.

our of before we plan opportunities update Earlier this Board. reviewed latest week, with investment discussed a number us. our strategic We additional

inclusive updated of these We opportunities. new expect early to in XXXX, issue guidance

$XX the includes million of plan platform including more infrastructure vessels, projected reliability as new than Our well and growth pipeline in to our cyclical programs system growth, organic investments. expansions, capital distribution as technology

information customer partnering monumental discussed previously, IBM. help As undertake system. established We've us with accomplished and that team upgrading and we're billing our utility including SAP will task, this and

management system financial our few Over we'll also as system. implement next dispatch the work well ERP new and as our years,

with The to will platform expectations customer level high us to that our the our experienced prepared leave deliver necessitated a for the along growth service has of well for an technology future need customers. we've enhanced

and both We enhance also see to significantly and deliver transformational externally. the enabling as us these we way internally upgrades standardize, technology and stakeholders, to service accelerate,

that growth initiated we to and achieved we earnings annual under XX, in just Moving have dividend historically see guidance Slide can you early growth XXXX. XX% since

our XX% and As principle, dividend has approximately of growth fund earnings been supported our many grow our We to adhere retaining back to by growth. that reinvesting future us dividend business the our of you to that into growth. faster know, enabling while earnings

XXXX, entire we our the Assuming of. is achieve the and very annual earnings growth compound X.X%; EPS would be that's of something guidance guidance issuing to team X.X% of rate since proud CPK

continue to the businesses, energy customer Slide To in on traditional we our serve. communities we XX, for the demand prospects investment future by in be excited delivery conclude driven by

in our to remains world Ohio, Planet into novel Full project foundation about renewable projects system, sustainable our natural including pipeline Florida. gas Found for to excited in-flight and Circle in of our in also waste acquisition Our Dairy recent investments strong. We're bring RNG our our growth Maryland

opportunities These deliver the us future. and future a pipeline With value diversified our position to a sustainable power will talented we team, positioned well well robust future. performance record the our into capitalize remain of our horizon, commitment on of demonstrate projects the opportunities a across long-term present operations, to strong financial Strength to they chain on more our enable balance as sheet themselves.

that, up turn all we for don't And questions. with why

Operator

Our Sullivan Group. Instructions] comes first from Tate question [Operator Maxim with

Tate Sullivan

and for detail. of it it Florida. part you these that Wildlight, and Or into one XX, going based forward. context? a context, putting Middletown appears meaningful the are I I on you. just It you thank just into mean, the projects, Hello, both many in be more of Delmarva thank the the mean, put with can pipeline could Slide growth there the projects

Beth Cooper

Sure.

your Tate. Great good hear voice. So, morning, to

headed things about. be One as to that picture talking clear able actually is into we're kind of about growth put a our talking those AGA, been were -- needed the we've that the we we a of lot very areas to became show -- and

it with And I that Jeff I'd really footage, you as phone some talked to about, drone some creating love us on be began, we so, also of to and want to drone But and footage. walk highlight areas. and jump then, the able show to you saw, let's start those

north, to on. actually hear -- that Delaware, the because growth will little going State pretty a people cetera it's Ludington, Baltimore, to in a you outside commute work. lot Middletown the a been of beach of Middletown a middle, but a about, little community areas the where the is in Wilmington is in high it talk middle of north almost has basically lot to is Philadelphia not of of growth So, even that and us et the community it's area that's live where a of but a there's

well. far growth. keep mind, growth so, been And beach a from other having the amount exceptional at in tremendous that at of there's it's we're But areas distanced as

is So, one. only this

the community Florida, the done large show Southern actually beyond development, is Central you the in -- we community we residential the In footage, show community the communities thing. be in that Wildlight just commercial a by and same community a again, to Florida, we drone because it's it's show so We that Florida. picked just to time show going substantial in But, could actually infrastructure. there's

the see there's is a that long examples, these to and but more growth trying the we're So, opportunity just you are is where provide into occurring runway to for future.

Tate Sullivan

examples. the from EPS pipeline I Related on is guidance currently? the page that presentation. that to in the then, related XX, Wildlight. page, to it's Yes, 'XX just Is expanded think correct? the And Newberry, in is not Newberry great guidance, 'XX infrastructure

Beth Cooper

Newberry Wildlight; not on it's No, to to the actually is actually map. related Wildlight left

as way mind, we're five-year from our being Keep before standpoint a both so, expansion. standpoint, developing at Tate, looking in capital guidance, we they're new earnings And and it's projects announced. an a are though,

about likely. And thinking are we expansion is where

earnings of capital guidance a XXXX high created there as we the is projects of occurring. that we've So, and have that guidance, there through some feel probability out level that's

inherent current is capital earnings that that and within So, guidance.

Tate Sullivan

then, well? project, as that related is And the expansion to supporting Expansion Southern Middletown partly

Beth Cooper

supportive be is it's those Maryland that growth further No, there. south; would each it area, that happening Delaware that's Southern surrounding areas actually is in growth of into happening

So, starting Middletown of of is in growth Southern come from is which much Northern is lot more but Delaware. happening beach the State Bridgeville, in at Sussex of a there's that's the west County, Expansion, somewhat to growth westward The the area. that's

it's happy. all area. the the growth of So, southern Delaware in be divisions supporting And I'd

Tate Sullivan

example Okay. color. adding -- Great Yeah, That's to we'll customer another Middletown. great examples adding talk of industrial too with

Beth Cooper

-- Yes, that area in well. it is. And along coming actually, going there is a lot as that's of commercial up development

potential that see it. be facilities to develop start manufacturing you facility, as may some surround think other there'll also that I so, to And

JeffHouseholder

is this Tate, Jeff. Hi,

had of of - before. gas add the serving guess, to there underground example, another that of propane other outside I town Just all in in that's an natural customers. variety a we never system And the Gainesville, this. They Newberry had was service Florida. little factor right

the town natural approaching the several so, And us last us has gas been to literally years, asking get service for there.

So, natural we serve customers a things. pipe into have the well to natural and generate consumers gas. gas demand it's along there, found I the that reflective, gas from fact our of then before or can take get facility natural and way town service, of those customers, think, a demand into later go propane come operations continued of the One is part and on again the couple once convert propane a service to a for we

to think led I Philadelphia not really in that smaller continue larger of our is opportunities Beth areas into surrounding as distribution it has to urbanized and a as people picture like areas we that and in systems. see being significant So, across of expansion, mentioned. heavily Wilmington, the move kind for of We're of urban reflective communities Middletown

Tate Sullivan

Beth. you, Jeff. you, Thank Thank

Operator

comes Instructions] next Brian [Operator Sidoti. question with Our from Russo

Brian Russo

morning. good Hi,

Beth Cooper

Brian. morning, Good

Brian Russo

Delmarva, I is getting in just through X.X% that granular of any compares Florida. read in X.X% a or X% Delmarva growth, of customer change? the I quarter-to-quarter last X.X% kind on and to too in type there in just is it mean, quarter Hi, think Florida, there of

Beth Cooper

Brian. granular, Too

Just so because take going much to the number added that's one quarter Wildlight -- be that's tremendous of growth a for might because to down signal even growth in individual is it's but get versus amount still a community, But bit; not, little for if the example really the happen. next, customers that you can coming. of anything example, it up or going there there's

long think So, right. slowdown. the We we've with see that, really start there's -- are we to looking now, right that. Wondering no about to over environment, term keep economic monitoring been I as again, the current going talked but

And all a but communities continuing have sell, have that to new we well. our Growth Homes not continued occurring evolve, we're adding of so systems we as are couple community and had to -- territories. yet. in is still of gas service

Brian Russo

it. got Okay,

potentially Newberry -- convert opportunities how propane you guys I do to mentioned you're to mean, Newberry-type urbanized kind you of in have areas. not heavily your many gas? footprint,

Beth Cooper

there say lot. I is a wouldn't

-- Florida. be Maryland; we was are mean, I Ocean -- about I Ocean think communities think a a you there but will when Pines, time. XXXX. Brian. Newberry, back There mean that from be that to XX-year in City, community, Maryland; one, Ocean I bought City, when time Maryland, to span candid that's

that there I say wouldn't lot. are So,

are think there I So, selected pockets.

But, there Delmarva sense be Peninsula. may There's at areas think there's certain so don't an in opportunity. or But Florida a hasn't made now one lot. are yet. there's know this it point, there I convert within suburban Maryland. to two the less on -- where I them Just

Jeff, you'd to want anything, if you add? have

JeffHouseholder

mean, we example. are service. like Hi, -- for mean, been in to our pretty a see we're state thing. Florida, Brian, The in day people X,XXX and Florida, I opportunistic goals we related think at I I moving natural And has significant. about a gas the No, into looking population frankly a same so still growth Delaware,

that little of of role. sort bedroom these a serves communities so, And Florida. There's like Gainesville, outside bit Newberry

continuing see move into They we're are continuing to develop to those people and communities.

we serve and brand we opportunities. with of there's offers have that nearby we're areas significant may new not development Newberry, as amount doing towns in where many but it So, drill still have We facilities. a can that

Brian Russo

then, margins to evaluating because complementary And to And then, of criteria are bolt-on weather. also, business? mentioned, the great. propane volume Okay, the obviously existing were or the your you What side, down acquisitions like? switching when is what

Beth Cooper

questions. Great

terms we look continued of first in at talking one coming both as that's -- I the right, things as We the on of movement the say, happen to But quickly. beneficial. downward So, it talked and can about, lower beneficial been have second quarters in side been there's mouth, what of has you're which volume the of. prices tends in we've is out quarters would less depending

And so, second months, the gone quarter. the some we've to and we summer into have spring into that the as retain of been margins the able and continued

second for question to we fronts. our regards something operation opportunities we acquire about there your right when into In look is to acquisitions, synergies existing add Number one, and an on something. several opportunity create

did it's we not only to our high and a programs, AutoGas, for those there; to into in growth bring an North in the natural systems. isn't Carolina; to growth North of particularly areas; go we community coastal in come opportunity like to gas us the can but bring our areas in high area gas bring two, Number Carolina

we're opportunity, to and where going table. we can our we to Brian, look the what an add services So, at bring

at of secondarily, to we financial a out want then, from per certainly, of earnings achieve we're is going And period it be accretive to we it over look to we it target return time share earnings want the -- provide. respective that it share standpoint, per then, our And the gate.

Jeff, are anything what at. criteria. those to we so, look I there's typically But add. some And of if that's want know else don't you the

JeffHouseholder

organizations. We're a a for also for the state. looking couple welcome between and integration regulatory We're of cultural fit we the looking where Just things. looking find will believe We're that we political ease. states, for in

of something we at things, with technology we operations; that table model business smaller to to what that; at that do we the already more especially doing, can like it or propane looking is the we can Chesapeake. when typically we what bring consistent some issues, live with we're modify where we're We're look something models those can in sorts bring table, the all inheriting; of to of these

you list operational environmental that be all of of the expect, it's a looking issues -- at as we'd those all So, other risk doing and, obviously, -- would whole issues. plus we're and of that things

Brian Russo

other post you Okay, that program, of great. over was of million million year, neutral right linear when XXXX to years determined aware Florida be slide. or ramp or mean, be or margin that the so be some today margin would and earnings does up margin GUARD it a The XX the $X.X on And should every before then, looking to type it lastly which that I is are right, mechanics is where -- that we of that's $XXX incremental generate there will XXXX? that margin.

Beth Cooper

on I depending gives many projects look on, if base. have a are at how on to some resources on expansions, good that going of you go which it, model, to start, what what spikes going I purposes a projects, you other good you But at from GUARD happening. we base is projects go. see standpoint could from back think depending and up program, where I looking think I a pipeline using else think But, and is how Brian, for a many growth and linear other that other dedicated, our being what as place are think, your down

Brian Russo

All right, great. very Thank you much.

Beth Cooper

Thank you.

Operator

remarks. back to I time, this or the will floor no additional now further we questions At over turn you. queue. Householder Thank closing have any for Jeff in

Jeff Householder

Good in for us bye.` you. your I morning. We this time we Thank thank appreciate the continued company. joining your want to And and interest everyone appreciate

Operator

second day. Chesapeake time conference Please concludes wonderful a at disconnect earnings quarter have this line Thank call. you. This today's XXXX and your Utilities

Chesapeake Utilities (CPK) 4 Aug 232023 Q2 Earnings call transcript