NJR - Earnings call transcript Q3 2022 | New Jersey Resources Corporation

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Operator

Good morning, everybody, and welcome to today's New Jersey Resources Fiscal 2022 Third Quarter Conference Call. My name is Drew, and I'll be coordinating your call today. [Operator Instructions] I'm now going to hand over to Dennis Puma to begin. Please go ahead.

Dennis Puma

Thank you, operator. everyone. morning, Good Jersey and New Quarter 'XX Fiscal Welcome Resources Call Webcast. Conference to Third here Westhoven, Chief I'm CEO; by of today joined Stephen team. management our well other Vice our as senior Roberto our Senior President Officer; and Financial as members Bel, and President

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

more non-GAAP We utility loss gross financial certain also understanding We will be as our NFE referring margin of net financial margin a financial net believe provide such measures complete to financial earnings, financial that or performance. NFE. and

to not these However, GAAP. non-GAAP are be a for intended substitute measures

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

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

Stephen Westhoven

you Thank to joining complementary pleased ahead portfolio report Thanks, to Dennis, business continues of that expectations. today. We're for us perform morning, and everyone. our good of

As previously year. highlights, This summarize its announced we service. placed finally, XXXX agreement. guidance our result Energy added our a $X.XX. increase into management the in fiscal Clean expect in reported To asset of Natural by marks July, now a this customers. third the project Gas Services Ventures Adelphia New new reach second improvement X-megawatt a quarter Energy are result, guidance for And significant to XXX% nearly of and NFE contractual Jersey our we commitments, increasing for season. an In few XX% of by is the servicing as heating X,XXX start

Clean share range long Natural to is due a a Moving performance We're strong to Ventures. and adding fiscal XXXX compared Jersey Energy electricity factors, increasing to of Gas, including Slide X. from $X.XX option $X.XX NFEPS margin to to share. combination greater-than-anticipated at to per $X.XX our $X.XX previous strategy New guidance our Energy financial increased Services This revenue increase of

is while strategy next remaining Energy the transaction This still value ability December summer. with at of this from we're Energy over fixed with portfolio performance payments of agreement management to line the years, what provides Our and capture volatility worth Services XX which the maintaining Services asset in XXXX. to business, In experiencing the assets, noting. an that executed our we is derisk

at the Moving our quarterly units, few moments starting next New each achievements to slide, discuss take to with I'll Gas. a Jersey of business the Natural

deployment providing position $XXX across is we've of Gas over capital million returns. of with capital you New left, that the in invested XX% strong with programs. can that see solid On variety Natural a Jersey a near Year-to-date, real-time

support in emissions track to the XXX,XXX safety investments and Thus benefit make our reliability enhance far for our reduce nearly conservation, and customers. distribution XXXX, X,XXX case of We finally, the the frame. over our new on continue And system of added next file energy construction to a customers we've time to in through and 'XX, combination 'XX of rate remain we new conversions.

Moving X. Energy Ventures to on Clean Slide

develop renewable sound. outcome that healthy to we and XXX exclusivity interconnection have development efforts of of the and predictability CEV processes a assets energy the to We The and fiscal of of streamline options renewable cycles. ultimately been delayed XXX investing pipeline will contractual at efficiency significant solar of markets in for and able over believe years. long-term positioned has resulting fundamentals in the megawatts sector projects we improved investment drive is team has operational coming the strengthen portfolio regulatory in in to the on greater deployment are rights capital through projects. Yet, will megawatts around believe CEV XXXX. be The country the a provide

currently nearly regionally projects would pipeline construction. projects another portfolio. of the under energy to clean addition size triple In This diverse megawatts of CEV's XX

of Moving X, We energy New We of construction latest us with benefit calendar contracted is site recently to in River remediation for This Center, how mill was the we Slide end part on could otherwise energy. the Jersey built business. be Adelphia would produce from which recently Quakertown fully briefly be a of stages Gateway, Energy the Howell the that to facility discuss to of in on keeps will in construction repurposing I'll difficult final Transportation continue renewable which excellent be incentive stations, On Marcus paper Jersey, former required to construction. and This TRECs New year. Township, a is land service in location program. Slide eligible environmental track the the Storage stream under by X. prior steady an to placed our completed X-megawatt oil Adelphia, Leaf creditworthy at benefit BPU's transition of example At operational in counterparties. which We're a compressor for & at of Hook the developments converted pipeline. revenue

track our recently Mississippi bode Our the market doing. call results. the conditions and I enough the of that chance value turn cannot long-term that, with financial say of at about record asset. review excellent the a the to team over work well for good to With Roberto they're things had a for along I'll visit

Roberto Bel

Thank and good everyone. you, morning, Steve,

impact As or million our financial third share net We usual, base of I'll rates saw on by $X.X a new main and X. that or XX highlight compared a SREC NFE. of of and NJNG financial few prior operational compared year. with $X.XX improvement Slide metrics shows drivers to into a CEV sales earnings loss as reported effect $X.XX $XX.X million loss million, per quarter. offset lower financial $X.X or the for went depreciation last of higher share financial period per an higher the were net mostly December electricity year revenues the expense. flat primarily the remained due of net to

has Gateway $X.X a million revenues reminder, contributions & and Energy largely [DMA]. by sold the Leaf quarter. As million, improvement driven driven Transportation Services the quarter, $X.X an majority by during the of NJR the increased historically Adelphia improvement of an its reported at River. in SREC of fourth of reported Storage

we a we highlighted revenue, SRECs. our cash million, $X XX, SREC The mostly lock portion services improved program. and of in CEV's hedging Slide flows details home SRECs large the revenues. by driven of sale hedging by higher have production expected CEV's Finally, these remains On installation by of of

on year plan As SREC I through Slide only is early capital XX% to will energy XX. our hedged now see, you for can turn expected our hedged generation and an XXXX XXXX. year

represents during For to communication. the current capital year, NJNG Similarly, continue XXXX last CapEx rate expect regulatory remain projection call. for completion around programs. last quarter's of is we more see the from communicated segment. fiscal unchanged at approaching at we Gateway as spending for following for And & fiscal we this Jersey our fiscal Transportation, the expect the largest XXXX progress Adelphia CEV's expenditure the our We'll capital to quarter's tighten Storage to and construction New

projected XX. flows Slide to on cash Turning our

flow prices capital through objectives. working operations on gas, to execute to fiscal strong turn end in to mentioned call As the last from higher quarter, measures impact at we remain needs gas sustained growth I'll is natural the and we Services that, continued in XXXX. that have the position we our would elevated cash Despite assess Energy With Steve. our a in of

Stephen Westhoven

Thanks, Roberto.

over our before organic that These We Exchange of company, the to has anniversary are our thank a to advantage grow IR bell ahead deliver and I the service the about X%. that, XX for to open our our take our York X.X% financial join time through shareholders. business raised We pleased complementary care. well. to the utility work know here it parallel of to as and portfolio our expected and you, continue expected not to help attractive and assets see in our our as our our you took initiatives, and paths clean questions. return total long-term to reflect yield based growth much Stock by existing to for goals. exceptional moment decarbonization exchange. NJR that a I benefit at has and investors Dennis And team XXth valuable, our provided speak career. today. years results the wishing financial decided year. of everyone NFEPS our guidance becomes And range currently as Dennis, businesses. targets call existing take to call that as of combined of regulated our to great to fiscal I assets infrastructure will more our our our professionalism for of time, growth segments turn We while provides with and after of performance offers with for Director strong like personal the exclusive. mutually report and recently time X% of us on of the And our this growth XX% I'd energy And a to investment to future. XX% growth dividend appreciate well a are rate the businesses the Dennis second want Puma with for of at questions, New I strong and positioning We celebrated Stability We're you efforts the earnings ringing these opportunities strength working highlight IR, other led call an achieve listing of I'll profile

Operator

comes Sunderland JPMorgan. Instructions] from Our [Operator question next Richard from

Richard Sunderland

business. of of in with acts the the if what terms existing new impact legislation. you're your to to there point, this there the opportunities and potential you speak benefits expansion opportunities are at in considered reduction some and credits both any of starting Maybe impacts inflation tax Could seeing

Stephen Westhoven

Richard, it's Steve.

out of way to and legislation. speak roughly is positive we right stay been that have around. what for But -- our come I'll now that that about soundbites business. So circulating very the we're can some to it's exactly to Generally, think thinking

it extending If and you hydrogen. storage energy about support at the clean and ITC, the for support talk look solar for you battery

that legislation supportive a initiatives of through So they number in for would those be the us. come

we'll on as keep available. too eye it's So But say to an to it, we're becomes going now, and anything. right certainly just update early information

Richard Sunderland

sticking of the And Understood. over terms timing sight in changes into And I how or XQ capital, then the XXXX BPU on it. either either guess, Got any of theme. renewable PJM thinking you expectations line been are XXXX? with about front your or the to Have front? there

Stephen Westhoven

some And of I process you whether that we to review of bit. the successor the accelerating a in these putting and program think New the earnings challenges looking in to third order is at place of at changed State for redo know the going call, last moving their -- capital We of PJM accelerate Jersey And little reflective or interactions. plan forward.

facts So we forward. capital to all And pipeline projects we've want got leave with a were these the say that going adjusted that we believe is constructive, be large of that plan as you forward. our very I'd I we going

you our So when and businesses feel to need earnings can our our complementary we forward, talk appropriate. expect the capital business in that confident We to of this loan is forward. portfolio develop. We feel able from very that confident be programs we'll going finally support release, today, going

Richard Sunderland

recovery XXXX my end. Got it. on it. flow brought down one cash both That's color. and reversion that does Got even And from could you timing guess, some XXXX, just in revision, the given maybe of I the or, that's impact normalizing expect you to helpful then both Or 'XX? gas mean near-term impacts? The prices speak normalization higher reverting some one of and last the

Roberto Bel

Rich, is this Roberto.

million flows assuming from gas million -- place and that remain until our cash what and But end So now so the this $XX operations assumptions the $XX of million we XXXX. for are in QX. prices covering [$XX] reduced and for

decreased would assumption. have in that definitely reversal. a significantly, prices relating that's positive If so And you

Operator

question comes Gabe Moreen next Our from Mizuho. from

Gabe Moreen

bit Services. Dennis. I to to be a Services winter of want if earning traditional of time, could lot profile earnings to, volatility the want how off full here in relative Energy can in start Likewise, been usual? any as still also that being congrats And benefit understand in Maybe there a drawn Energy volatility XQ. Services expectation there winter the see little say, or Clearly, given we're much with seeing just to now may you the earning same Energy upside is the confirm, there's I'd I

Stephen Westhoven

Services? could question, just ask that you asking that Energy whether were again, you of the part last the Gabe,

Gabe Moreen

now of in we're of versus the of kind winter the capturing not do? leaving earnings the yourself know you're here, as usually Steve, terms forward I volatility position some Yes, you for again Yes. necessarily word

Stephen Westhoven

the the has of amount monthly seeing that the I'd here and No. natural you over well. short-term -- I increase raising and to AMA We're inflationary it's of just the within seeing it's mean, And company that gas hedge some electricity assets prices basis portfolio benefited There's able influenced. value for that think offsets volatility. pressures the to provide to volatility it's see some of group increasing prices. can a say of the what we're electric sell also opposite. portfolio continue is that the I NJR. a wholesale you're perform for some that where to the to been prices markets of prices, a of we our really electricity and at those that the into because And we've invest on CEV, you businesses benefit inflationary been have as see energy outside

in but is value. we are create that to to don't able like businesses nice concert certainly, the inflation, So to see the work that together it came see they and

Gabe Moreen

And that how have at and of can the then could time? strategy that that CapEx kind to around your, of maybe for [pie] you you range 'XX, or CapEx curious you'll ask your need the visibility. kind changed higher if Maybe this for CEV Great. end point has low just I is ordering guess, again how projects. in the whether of end so point I'm what on components future I

Stephen Westhoven

end, we that a said too It's early the same in have we and add that schedule. our but say to to that either point we number before reserved thing construction to purchased of solar panels

we've for well. the feeling fiscal got good pretty the in this as we not projects as hedge So years start year. move But part next these remaining construction of period a into to a place for only

PJM projects loans as good were Rich, the process, state feeling I about process, of we got such it get working And to develop. with we're So just into hands New construction. our of matter we clear, be before, a of going to and think, said development will that the of talking that, -- just to we've currently. large in get these process It's are some be a able Jersey associated that are to with pipeline of

Gabe Moreen

you've in And what Got mentioned might contract be more you you can contracting River. are I'm tenor to the little a what profile it. or the Leaf visit been what wondering give before? to took looks there, a uplift if relative color Steve, on you terms seeing

Stephen Westhoven

now. as storage the balance forward it the storm more it does becomes extremely and current that of continues in The able impact being to which is going rearview Yes. know to and you've Uri, ultimately, extremely under more got supportive, the certainly that volatility to stress, You be right? is volatility I important. look region But mirror is aftermath

have contracting contracts We out seen go increase of for in a multiyear our lot churn.

into streams So we're the get come facility going confident over to that revenue future. our and yes, does expecting renegotiate But higher forward. for as roll prices we're in to

there cabin [fourth] a developed. There's constructive. very So that's

does So the we'll there's look capital that can that more be at market and the well. to that get point if deployed, as up certainly

point. good in a be market this it's at to So

Operator

Travis from Morningstar. comes Our Miller next from question

Travis Miller

Dennis, all with Again, it's congratulations been to help. the working years a here the Appreciate you. pleasure over always

Dennis Puma

Travis. you, Thank

Travis Miller

Yes, sure.

could into the do you then winter here bit bills, and you have program into coming going little gas like In this winter. going the customer terms year winter, a the the you into you about down, I prices talk earlier see maybe you the think? of through customer going Obviously, wonder system. had the trajectory of New looking hedging if Jersey's kind are bills months, What peak

Stephen Westhoven

that's yes, for pretty of program winter. purchased to place I gas in ahead supplies hedging a Travis, are mean time well generally to the a long we've been majority the got speaking robust a very and of

largely had that increases bill the We increase something. able customers So to those we've a EPU see as we much to been sales place. insulate one to likes to XX%, no customer like the as submitted take increased had

Roberto Bel

[XX%]

Stephen Westhoven

was [indiscernible]. What it,

So can which ultimately, gas or don't It market, almost is against like nominal. temper XXX%. as that see up but relatively it, you you to XXX% was

customers market increases inflation price from But normal more the bottom largely see And least plays is hopefully out, that down gas in you how for certainly, be insulated we'll in at will the large recent is customers a natural line normalizes history. get gas So back to and place. taking good.

Travis Miller

Okay.

figured. I So

that is it general. Is production midstream? system at enough in the constraint hydrogen, right hydrogen? even the the are second, even what then or you green constraints Was high more And but yourselves, distribution for technical your seeing constraints producing those Okay. market level, right where see you it in within now system the on aren't level, the in level -- Where do green now? general, not even necessarily in people something on just

Stephen Westhoven

right? support of would lot certainly I it's maturing. it. it's a describe There's think for evolving, market, the I And hydrogen

once prices see that think down bring development You federal levels, developing technology once on scale equivalent in at got their proven in from to to an the basis. and green greater hydrogen which that takes you'll down around kilogram, to those is place hydrogen, then that shot with able you're level driving come a be $X the [$X] way. going I current then fuel like used prices And

a to these come system come I the going We've act So a matter can believe we clean pipeline very of like deliver fuels forward. It's balancing we'll in for to to high-quality you think towards a carbonized the in drive to a got that the just NJR, any we impact as our it's to scale. that scale, technologies way over start And of and technologies grade time, implement lower and future. future. carbon

So that about forward, it, effort helpful be going a some say, and happening us a industry. of our it of, there's we're the companies it. lot moving for is ultimately, that's third-party these are to outside lot come It's looking going for whole driving But I'll and company over way thinking to time. the there's which is costs, and down at

Operator

That for Q&A hand I now back remarks. session. closing Dennis will today's you to does conclude Puma

Dennis Puma

us to joining operator. want you Okay. you, thank today. I Thank for

a a is reminder, on As website. recording of our this call available

as I'll and and to said, from get Steve work you To in few for will this you, perspective and and management support one friends being thank industry the learn wanted amazing over Also say all words. to needed the on [indiscernible] As I, be financial the colleagues know so and my to to their entire a initiative. best discuss financial the always you for call, team, had few with in or opportunity a few a minutes an I available and the September, community question-and-answer been take of the thank want my to we we've I wanted retirement I the in our our community, you journey I It's years. be past to last a way. when listening laughs

assure is listening. years. family I I'll that support be I and call the thing thank for patients only over Finally, my unending the you can want to their Guys, doing November for the

and those As at and where to seen I me golf with family places it. so decided unforgiving I'll and doing wife Yes, another some airports. only new, take forgive of is into life I perhaps transition airports. be I've for friends back and shot over being years Enjoying and retirement, the traveling, to to my this rooms conference finally some

me Let that know goes. how

cross interest as the I for again I memories, future. New then, So in Resources. in appreciate the and But our thanks everyone. your appreciate, hope until Goodbye. we paths Jersey always, us will in

Operator

That does conclude today's call.

lines. You may now disconnect your

New Jersey Resources (NJR) 6 Aug 222022 Q3 Earnings call transcript