NJR - Earnings call transcript Q1 2021 | New Jersey Resources Corporation

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Operator

Good morning. My name is Matt, and I will be your conference operator today. At this time I would like to welcome everyone to the NJR First Quarter Fiscal 2021 Conference Call. [Operator Instructions]. Thank you. conference Dennis the Investor Director turn Relations. will over Puma, to of I

your may conference. You begin

Dennis Puma

you, Good call senior of Thank our Financial first joined Okay. Officer; Matt. today management President quarter Jersey to here as Migliaccio, fiscal team. Resources and New as CEO; 'XX our Steve well our conference by and Pat I'm morning, webcast. Westhoven, everyone. Chief Welcome members other

of as assumptions Forms for precisely. many expectations, statements on our the X-K ability include statements filed our expectations, materially the obligation in could in forming beliefs today's These found to and laws. any beyond call control to and do release X. estimates within furnished earnings to the As This our forward-looking the recent statement caution particular Slide as our from revise are know, be forward-looking in that meaning any events. Form to items basis of found cause can statements estimate call or certain results statements factors wish differ you this that securities including or current referenced in and We contain XX-K of assume other listeners section and today's with forward-looking of by forward-looking most future We Q in statement, review light this the SEC. herein the not,

certain to NFE net as performance. such be financial NFE. measures our also more a provides that non-GAAP complete We or will believe referring understanding We financial earnings of

for not is GAAP. a intended it to substitute However, be

financial of Item discussed XX-K. Our X measures fully in are non-GAAP more our

website from will Steve we'll to the our begin Steve? our by that call Steve also who morning. and financial slides results. CEO, today's to The found and presentation on up is today I'd Form the X-K on review agenda our Our this Westhoven. said, X. Slide call questions. Pat, will call President followed highlights the quarter, your over Then on accompanying furnished to With filed our open with were like are available today's turn for

Stephen Westhoven

morning, you and joining Dennis, Thank us good for Thanks, everyone. today.

in the on take New performance by of We share, strong business, per New of driven highlights. Natural core you Jersey $X.XX our reported Gas. Resources first X, delivered performance Slide NFE quarter. through I'll Jersey the the And

take filed also the Southern move we infrastructure improve are for We to consumption New and approval this help will our acquired $X.XX fiscal hear of over Program, XXXX appeal. And into energy NFE with increasing expect million construct our Energy NFE to Gateway Jersey fiscal And the Mt. the accelerated to a our project Southern proceeds save year. later in natural XXXX, Ventures, Court money. for program Laurel contracted program result Energy reduce is Clean In business, gas service million management you a new Reliability of per Storage we in still year. gas customers reaffirming it And expect news, Link to on and & granted Services received XX% But SAVEGREEN At despite transaction this on will to this share of per we we cash detail place positive entered XX-year XXXX an clarity Investment our PennEast is million slide. of our almost energy guidance. our next $XXX project. at efficiency the be to infrastructure. our an I'll recovery the resiliency X.X begun period. there's we long this $X.XX in We share, for Supreme we've its megawatt guidance petition to of excluding term until Adelphia Solar that plan their reliability calendar agreements, portion $XXX to to $X.XX and share year. more Facility, are PennEast yesterday, $XXX the invest which the At to completed our Transportation that X-year, to to forward designed $X.XX through asset just projections Natural part of prior more of from natural NJR into per U.S. $X.XX which guidance increase service the and Gas, -- and the a convert

with counterparty talented of team. utility. the our a our natural a AMAs our are Turning of needed the to testament that portion These of value into hard illustrate the Services supply, Services transportation series assets monetizes Slide assist Energy public controls. securing portfolio transactions it a value contracts X. the entered transactions gas The in an to of of work investment-grade and Energy while of storage

through the cash the over volatility earnings AMAs. These first call, Let increase And these price will million lower we'll be per years the will $XXX through as transactions XXXX, After fiscal slide. of fiscal our risk operational year for of and transactions. a other assets pipeline on guidance financial $XX also you next Energy year and of $X.XX business. will of specifics. payments reducing will terms assets. agreements, walk flows take need the of and FY risks the share, our in the of XXXX, some result additional our see the me benefits NJRES to The million allow November to you in management impacts transportation later include, of Under the NJRES receive which with Pat us Services through Beginning from by XXXX these will release NJRES without XXXX. value portions direct of the NJRES our for The predictable more weather-related is of per XXXX, capacity. receive approximately X payments extracting begin associated

the settlement equity the our and NFE Turning to guidance our This for of AMAs a increasing our expected fiscal of $X.XX are impact X, Slide cash on to we share. to forward. $X.XX guidance per range the XXXX overall reflects of

AMAs rate from XX% off originally to other term of and excludes any guidance Services. $X.XX long our based Energy per remains X% $X.XX which the our communicated contribution the share, of of to annual impact However, growth

Pat the later, AMAs benefits NFE not every same As year. of the discuss will be will

mentioned you remarks, I'll As opening on Slide some Gas X, of the New through take And a in highlights. Natural quarter. Jersey my had strong I operational

pandemic, Looking returns. below at X,XXX the real-time $XX Natural in New added top Construction Jersey Reliability new the capacity. Link XXXX. I'll see with take And the Energy the an with our progress, costs top fiscal million Ventures. Gas can quarter, providing our date now This core of project which the SAVEGREEN of in customer project have of program XXX recover installed mentioned now received you X, the associated customers, ongoing filed the and additions expected from have as in-service quarter. left, continues the of IIP earlier, year. case only CapEx highlights megawatts rate you and ago, X/X we We this with our over year the is On first X.X approval almost to we as invested growth of near complete service XXXX. the to during I COVID-XX slightly to the operational on through We we a we on plan Despite Southern to territories. megawatts file same the Slide pre-pandemic. this the favorable And right, was due demographics period other about we XX% added for capacity business, our Clean in for

was of transparency. The agenda XX% target sustainability we company by Slide of on of goal emissions significant NJR accomplishment new of Jersey XXXX levels, hard a reducing investment This environmental in that project operation of well that strong is program. our the of XXXX $X expected a NJR can projects our New has we've And our on and for team. fiscal a turn secured through is see and some quarter, a significant commitment are report a made commercial XX% upon ahead of you the to Total CEV to capital fiscal million outlined million to of higher emissions reduction announced $XX NJR's moment about important progress. schedule. in investments, million I'm Pat, and that we talk have before to XXXX. our work operational goals, the and innovation, $XXX responsibility. And contract the portion strong X. or I'd bottom efficiency call We $XX Sunlight about shows finally, which we've targeted Advantage. pipeline at sustainability hedging invested of our million for for this right achieved reflects to But significant progress our at which set exclusivity focuses like reductions, Last with energy with decades made It quarter The over I reflects XXXX, by worth of safety sustainability either our XXXX. CEV revenue SREC under commercial take and that pleased

target are Our XXXX on our new our issued aligned ensures company's we for Annual statutory month, reduction. emissions is Corporate with available XXth Last Report, goals the website. our goals which Sustainability state's

communities and first investors time, the and report step with established is the issues. includes strengthen For by our this communications financial year's disclosures on which another reporting to in our ESG transparency these SASB, increase

Pat Now the go I'll through to call turn Pat? over to the financials.

Patrick Migliaccio

good shows of for Slide the drivers and first XX Steve, our NFE Thanks, the main morning, quarter. everyone.

for where or or Day Analyst $XX.X XXXX. in quarter $XX.X the the the we're million communicated $X.XX our quarter method in deferral million of accounting share NFE compared share such, NFE for at our first to CEV. Reported And is comparable periods. as per we the As this recast we've November, of $X.XX per fiscal financials of of utilizing first

was Gas quarter, Other improved revenue NFE primarily interest compared of due a rates to settlement depreciation margin expenses XXXX $X, project interest in million, New Gateway. modest and with quarter spreads. compared was especially placed slightly year, a from of due a income case operating to to primarily decrease Energy ago. Leaf to Storage projects related saw Leaf River, acquisitions which quarter down partially mostly from increase expense base lower maintenance to by related a higher and by and partial $X.X service, pricing expense. increased and as rate the Transportation gas Jersey a & fiscal saw to financial NJNG's CEV of the new Services to Natural services slightly saw operating Adelphia offset to due related primarily increased in River million to O&M during last full costs, $X.X offset higher Home expense. natural improvement year an due increased is higher

gross our share As you segment Steve NFE contributions NJNG the can fiscal utility per distribution On help for revenues total accounting walk NJNG's me net the of To see businesses, our margin earnings you will $X.XX of CEV's financial with of understand and XXXX. we mentioned, NFE. $X.XX through to and guidance occur. XX% we how let core Slide quarter, our reaffirmed by XX, for CEV, expect

first gross year, we in to For our of second the the year, when our the with approximately half SREC NJNG, majority line revenue. in recognize the quarter, margin utility half of our expect historical in to come the of we our of trends. of At expect fourth recognize majority will XX% particular the revenue CEV, in the

Transportation We & to because the Storage Slide expect XX, price contracts. net program. the the of year, throughout our fairly the SREC financial highlighted fixed earnings we've details be consistent of of On our contributions hedging business

XX%. ensure XX% SREC to actively volumes Comparing And have of year largely trading fundamentals changes hedge and prices. by over now XXXX, We remained XX% SACP. with we our unaffected market our increased are hedged. to strong Energy future of we hedge year to XXXX XXXX, at SREC SREC level in continue pricing revenues

contracts utility. revenue Under capacity for I'll and Slide the revenue and counterparty, Turning our recognition will requires the standard The initial NJR of accounting to nuances both of permanent to initially the AMAs. the agreements, the the later release XX. some the the permanently transportation explain will on, the release. to to release terms allocate to achieve to

proceeds. XXXX. With generate between why guidance occur our long X% lower from off based is This fiscal allocation allocation and NJRES cash to AMA excluding revenue the AMAs. the in the the revenue will of disproportionate to amount and of Subsequently, signed a impact disproportion permanent mismatch years that growth base, this XXXX NFE term a releases revenue NFEPS is XX% and of

of some NFE, impact charges of the note I does revenue reflect it Finally, indication the that and provides general items. while not the other taxes, demand will

I'll that the though, Importantly, additional us provides proceeds cash benefits with detail shortly.

on of you previous expect on estimate to operations a right, long expected chart X% from Slide cash of see you percentage, the XX, our supporting CAGR the rate of As our to grow flows flows the can to dividend term to that from our as strength smaller cash can we XXXX become compared XX%. see implies And are growth approximately our from of our the to dividends fiscal now XX%. XX% XXXX

the Another Slide is metrics, can to XX. our AMAs benefit which improvement credit you see from the on

our at As million and fiscal at no need metrics entered December XX% time, we into is XXXX during equity increase forward XXXX. fiscal to mentioned you reach to equity now ratio an later the call Analyst debt future. we turn in we positive strong our to Steve date, issuance. about And have adjusted fiscal Analyst credit to our do. closing as shares AMAs, to are impact reported FFO equity place we teens expected cash which in put have in we because and XXXX XXXX, At X.X Also, metrics, I'll the back will our issued issue Day, we million X.X high Day, the for remarks. rising shares, the equity our XXXX. no settle longer of we to by forward block of the And foreseeable that to additional a from during when some over these needs an we

Stephen Westhoven

Pat. Thanks,

our I'd flow off track and increased NFEPS year. start good strong this like quarter. XXXX growth. is Before fiscal support on a fiscal NFEPS to by guidance for share, expect we to our guidance I cash for open meet dividend questions, XXXX the per call summarize $X.XX our to to fiscal the to We and NJR

infrastructure key be year. and progress, Adelphia to expect SRL Gateway, to continue both in service and make this projects, Our calendar we

quarter. metrics And Day, allow we've our thank Services of progress questions. further substantial Our the Investor improved equity our as now in settle for we business no fee employees the more our revenue. need credit us all equity their cash our throughout past to I issuances. And de-risk based forward. to hard I'll Energy work for commitment open said we providing for have made to stable block by in want this And call

Operator

[Operator Instructions].

comes with question from first Your of the Moreen Gabe Mizuho. line

Gabe Moreen

that to things there there puts and any takes reason think there's rate call -- time and tax the least updating on recent that. out frame, a to Is X% beyond, X-year X had AMAs the to and the of the in any on different EPS will the next at I to you'll and I of X% And, as some point question Is think that, over AMA Just it, guess, of rate on couple how like plays read a couple those reason impact? ITC XX% growth the of credit that impact? years. markedly to think sort as share extension AMA that. be the about per over well sort years sorry kind in questions $X.XX the the at of that impact XX% I growth and be is that couple that there looking for you of 'XX A into of

Stephen Westhoven

itself Services amount to benefits how businesses. And a but revenue think company. of XX% way the about long also positive positive long think the AMA the anchoring fee-based business our But we Jersey in and so Natural financial not only are fair and off of the essentially businesses, the our earnings, to New I Questions adding and we're by Energy as about said as and in X% rate, Gas that's to term there. talking it's throughout the and bringing CEV, growth infrastructure our our growth time term AMA said, rate core impacts Pat and today, no, de-risking

But the in infrastructure about term it about rates, helping enhancement off sheet. think of bit our So think core coming still the AMA quite a company that's businesses. the the overall and our by cash growth when for certainly, you long balance out and

think, I way is go. the right to So about it thinking way that

Gabe Moreen

maybe CEV of settle AMA, weigh to? And could from I'm potentially and you some How maybe context wondering did in expect than the of what then versus, the elsewhere. proceeds equity you call if that it would the the terms decision do in lets cash of and the I potentially let's more just of investing kind at additional maybe also cash just cash forward. to follow-up weigh that the investments in or accelerating terms it, coming of you in

Stephen Westhoven

could to gradual It's It I us the nice CEV. investment I as in ramp-up we've options. certainly is our flexibility. think of in be have as out Investor rolled gives it financial Day, -- what think But we characterized got

So we're -- that's 'XX and investments got and 'XX ramp-up then we've going making things unprecedented we've done investments past. not that 'XX, 'XX. a the we're the in And in into making

we got plan. And and at investments this out accelerate that stated. it should And we nothing to option to we stick at as our us our time. to in really, the intention we've certainly certainly, and the nice have but to have options, it's gives see Day the So as rolled CEV flexibility. But something, to is announce we Investor make

Gabe Moreen

you just on been And that? me. last see going? What quarter where have at the you what just you one can of of update impacts where utility see and for impacted that Maybe sort and us COVID sort kind the of

Stephen Westhoven

up debt pre-pandemic impacts. most talked that far -- Thank most slowdown COVID a where in to utility. to restrictions. there's identified we it little bit if in you the the growth, the our still, bad fourth bit think during you. COVID were a quarter. I little likely a We But at just A year compare from customer of last for of But we're about call, bit due the we've part, little tightening not

Operator

Instructions]. [Operator

with Ciciarelli Richard Bank of line the from comes of question next Your America.

Richard Ciciarelli

with rate, why you didn't doing it the off relative reason Gabe's elect Services question range de-risk, to long business any X% following just the narrow I term rate I the up you're to growth here. But the growth core on Energy just of to XX%? wider understand on

Stephen Westhoven

alluded Energy a our are to So bit growing company. during that Services I core in can we are they're upon and being and the that concentrate coming businesses as to call, little made. build how we be going the infrastructure in on think really, want And and those the that to we transactions chunky payments businesses a

certainly there us we way like at wasn't it and this, time, from reported been those we're remember financial large But covering those impacts about outsized had Services, and when grew long a from you've gains Services, the good thinking So we Energy for them. we've were some Energy points.

Pat as the think de-risks And about I as Energy based saying see we're lot some So there. described this to benefits we benefits businesses, stable to But our certainly fee Services going stick Migliaccio transaction the a talked positives just you outlined, and off certainly, was now, are like core guidance Services, to brings business, can as from this revenue, financial in Gabe, the I from of of right we Energy transaction. today. the

Richard Ciciarelli

just And that filing been And then over a expectations rate still there? the the are potential pushed to turning could any pandemic? case given we're on just utility. the be What upcoming

Stephen Westhoven

Kahrer, year, SRL Richie, are on who's done you that. this the little flavor be our Senior Mark trigger we the expect so that rate schedule us to as So the case. our going project, --? just to just calendar completion got on Mark, But can to give which end a Regulatory to is I that today. quickly of by I've Vice coming remember, And President of with goes,

Mark Kahrer

Yes.

able lag. all that we'll reduce to time case regulatory said we're the be to we've is what going try that in-service settlements date -- to along done. So think get the We rate to

We've other the doing of the near customers, help for make But the kind the that seek them So With they going bills. reduce have to And been very can. that continue we're they it just able -- through we kind been of energy benefit we'll energy get to customers their impacts as are case well, work as future sure from us. of worry that future, to that approximately making and everything that can actively ways and assistance respect there's as working time sure trying that we're a and in looking efficiency file that to mitigate to to impacted foreseeable to we're to now. have we'll to also while out customers things.

out the customers it's because us this. -- as that sense, continue one get -- reasons any to awards they those the So, J.D. can to of Power the those we In trying why much we we're year-after-year trust again, can. our as customers really on help reach we know think of and

Richard Ciciarelli

with discussions credit what -- -- on the here. had mean? rating you just that contract on agencies with -- your AMA the improvement Have then metrics And the any the could potentially given

Patrick Migliaccio

Richard, this is Patrick Migliaccio.

the both New recall Jersey is Moody's through and you that So only rated Natural may entity Gas Fitch.

improvement is be And a not would the credit entity. so which rated writ the in metrics NJR large,

Stephen Westhoven

Richie. Thanks

Operator

[Operator Instructions].

the Your of Pourreza next Guggenheim question with comes Partners. from line Shahriar

Kody Clark

actually Kody Clark Shahriar. on for It's

Stephen Westhoven

Kody. Hey,

Kody Clark

contracts is market So earnings? back more for is de-risk the them there of into would more enter just that were of NJRES EPS what these in in wondering Kind rate? you AMAs. into long to back if appetite further a you to And to the on then position a term the would interested be be in these add you agreements, growth that the of chance

Stephen Westhoven

Day bringing group. do earnings align around messaging So of business that and if could revenues de-risking Investor we that transactions, the itself with these more our of certainly, of and would certainty our Kody, more and clarity

certainly we of in counterparty. so. pursue portfolio would the to that. Energy still has do finding capacity matter right a the Services So just It's

paths, dividend our other I metrics long business And, in our -- again, infrastructure to context need that. all some still parts term able upon ones we businesses, our investors earnings have and that financial the And really that grow does two of upon rest that we almost to Services year-after-year and Services got it's as be to the pursue If breakdown. we're it. AMA with -- will a But think supportive growth that's I at for its that to certainty very the the to be certainly rate, customers. businesses. on it, that, other we our our we'd that feel Energy think we support look the comparable and businesses part income, for we've way ability Energy different upon got be could can of would so like variability of the our potential to certainly rely thing enough the build still the and be build about concentrating it and the of So utility and then to of and going

out really in Investor are As to messaging today our financial and looking has infrastructure just Day the investor, benefits that given we're de-risking Pat at which very grow CEV, the utility, business this attractive. outlined

Kody Clark

the the on PennEast to obviously But have still into And What's to back plan? it's second pass back to comfortable are to that steps then into least X adding for there hurdles the well PennEast, would the what clear. wondering Phase plan? willingness I'm Supreme understood you be is Court's at project hear adding point trigger the case with for positive. the

Stephen Westhoven

And certainly, gas is and project. into an PennEast region. need that to the new seen a this come we important region you've constraint, there's So whole pipelines

contractual So we're supportive have very know a able to regulatory basis. met exactness. to with point would to some way be that put their the would a a in plan. hurdles that And that their there's back of a we dive that through work them, in And timing only way from but being question, work us through way not have the really them met We're few think of -- into for your supportive other I to from PennEast.

see So process, I supportive continues think and work very get of to PennEast the again, we're as it like PennEast and we'd to through built.

that point, they the But But we're the work able few we at more be Court a go have forward. Supreme point, then hearing this still through plan. the put positive certainly back de-risk case, development, to As may for hopeful project, the some moving and into the at clarity, there's project process they to we hurdles over.

Operator

remarks. further There of at time. for Director Investor would turn back are Puma, Relations, I to to no closing the like Dennis call questions this

Dennis Puma

I to joining Matt. Thanks again, Okay. thank everyone today. for want us

Resources. want replay. reminder, this is website a and available New And appreciate on recording a to, As always, Jersey for of I interest in our you. Goodbye. your as investment call Thank

Operator

conference call. concludes This today's

disconnect. now may You

New Jersey Resources (NJR) 5 Feb 212021 Q1 Earnings call transcript