Earnings call transcript Q1 2023

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Operator

Hello, everyone, and welcome to the New Jersey Resources Fiscal 2023 First Quarter Conference Call and Webcast. My name is Bruno, and I will be operating your call today. [Operator Instructions]

I will now hand over to the management team.

Adam Prior

Thank you. Resources first Jersey and conference New webcast. to fiscal quarter XXXX call Welcome today our Financial Steve Roberto joined our by I'm here team. Westhoven, as members Senior President senior management well Bel, Vice President and as Chief Officer; other of our CEO; and

today's factors estimates of that This expectations, found beyond this of statements cause meaning the from forward-looking current the our and and to call forward-looking or basis statements beliefs results X. differ listeners many in control include the Certain the ability are to securities caution other statements within materially assumptions forming of on Slide laws. call contain We wish as our estimate could our precisely. expectations that to

the release most today's statement not section We revise referenced herein in obligation These XX-Q by in forward-looking XX-K statements furnished forward-looking to SEC. statements this review Form our in items filed of earnings can events. recent and future Forms as do light including X-K and of be the on any any also with assume or found

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

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

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

Form highlights, this this are the website The Then today filed questions. for by results. on call today's quarter's with agenda is who on Our were followed accompanying furnished presentation your begin will X. found slides for Slide open our and our our will X-K Roberto, on will morning. we financial available review Steve

I over Westhoven. President turn will CEO, Steve. ahead, to With Steve our call said, that Please go and the

Steve Westhoven

and of event also strong This infrastructure resiliency delivered first to speaks Thanks, and talent termination the weather the This to people. unique performance in of We the and good morning, our the quarter. over Christmas included our everyone. exceptional results physical during Adam, the weekend.

event, we result $X.XX As a of XXXX fiscal our to NJR's by to share. raising guidance are per $X.XX during this operation successful $X.XX

back results and Before for on update our sustainability efforts fiscal report I'd Report, and Last other Slide sustainability XXth efficiency and accomplishments as our we The low details NJR's an energy fuels, like the areas we stewardship. on well consecutive innovation, and as X. annual to our XXXX. begin Corporate dating to goals year, decarbonization and report to our with approach XXXX environmental issued move the quarterly ESG-related to carbon our in Sustainability forecast week,

I'd like reduce to most the is in Jersey history. tool we cover just invested and to with company's believe emissions you. investment a the efficiency Gas' energy single highest few Natural highlights $XX programs, efficiency initiatives. this cost-effective year Last of New year, energy the our more of than through in fastest million reports We type

these projects milestone States. of significance, arrays the largest cap installation continue programs element to this our decarbonization solar Ventures largest national solar, to in landfilled solar Running long placing two Natural United a advance leadership the the by one Jersey On Energy area. floating service leader New in has our Gas strategy, including and is we been Clean at central into of and a

to an medium And a that our and enable our hope environment. for our outcomes local all that to have and the report. make partnerships These supports the foundation finally, you opportunity million resources drive $XX We work. of foundation difference that charitable review endowment communities long-term on focus

a ago. XX% same increase to share period X. first We Turning reported per year the financial a net in the earnings Slide of $X.XX from quarter,

service low territory, impacted these impact under limited are Winter Elliott, that the as the record a Storm In XX temperatures during saw The just as historic U.S. As performance which company's especially was of we I in our of hours. fall temperatures in event locations noted we supply proud XX certain gas earlier, entire much our degrees country. in

customers without resiliency Gas, of met Jersey curtailments. ensure our the throughout obligations to able our to New and we supply well their week the dedication our customers. speaks holiday team, were This enjoy our as holiday network Natural the which that of worked all At as to gas to

event. from during At Storage Gateway our we Transportation throughout the period. than storm, higher performance In which during River our led significant the exceptional created operating option volatile the Leaf strategy value long NFE expected the Adelphia winter generated to Energy business, reported & Services, conditions by and winter

to to continue as at also million that the with in we We received agreements December revenue associated XXXX. payment fee-based $XX.X generate deliver a unit management commitment stable on of cash more asset announced our business

XX%. Energy placed fiscal into the growing of since Clean at Ventures, Finally, commercial over year, or solar we megawatts installed projects end four the capacity by XX service approximately our

X. Slide to Turning

XXXX result we guidance range $X.XX fiscal raising $X.XX are to outperformance, NFEPS $X.XX share. As this per a our of to by

XXXX. are group. We among end communicated maintaining guidance, from the long-term we expect quarter, the last the And original is be of as range XXXX of our in at growth highest to XX% expected our for also higher which range NFEPS our fiscal peer

next Gas providing to with $XX strong highlighted over first Natural Jersey As customer growth, in in year. million file technology major CapEx completion a case of my the on the customers invested approximately returns. Jersey to adding I new that New We X,XXX the reported our strong the our opening XXXX, still investments. XX% quarter Slide in last near mentioned in X. of We real-time compared Gas had first quarter with consistent of quarter rate quarter X,XXX during over Natural of first as remarks, fiscal We expect execution New

to Moving X. Slide

solar Energy over into XXXX, to future fiscal new placed megawatts of investments. a Since continue have at maintain robust positive pipeline We service Ventures. of end solar the see Clean we momentum XX of projects and

and at with encouraged recent New reform are solar We PJM Q policy. progress Jersey

PJM's proposal. approved November, reform Q late In FERC

term of the approved navigating still should X process of of in greater state's near New development broaden The program In solar XXX efficiencies are at delays, opportunities successor for Utilities over this predictability to development. and help megawatts solar the solar annual Public megawatts. create Jersey for goal incentivizing state. capacity we projects December, the should Although, least Board

And with statements. that, I'll turn the the financial Roberto Roberto? call to a of review for

Roberto Bel

you, morning, last of $X.XX million, of Thank million X Slide the $XX.X NFE per drivers shows quarter the or Steve, share reported first our compared NFE and $XXX.X per year. XXXX. good for We everyone. share of fiscal with $X.XX or main

of rates that an December million, base XXXX, went $X.X saw from utility Gas of the effect a new incentive on primarily growth. margin into Natural Jersey BGSS New improvement programs impact customer contribution X, and our to due higher to new gross

$X.X improved million, fiscal Energy XXXX operational Services to the by operational performance Adelphia Adelphia Gateway becoming quarter higher team both fourth the River improved execution primarily of due & NFE at fully Leaf (ph) and $X.X due sales. excellent SREC Storage to electricity from quarter. Elliott. Transportation $XX and increased our to CEV’s And and by the in due largely million by million during finally, Storm during the Winter

capital plan XX. on Turning to our Slide

over XXXX the unchanged between $X.X call. across and company. are from conference Our the billion projections the and $X.X invest for And to we next billion expect XXXX two years, last

lines X%. quarters, in deployment to program target time long-term regulatory growth growth CEV, more as X% We particularly New approvals the of is and case expect Jersey of with to clear. business in to consistent throughout expected tighten PJM's NFEPS projections future This our support our is interconnection become and CapEx capital our units

any Finally, particular Slide debt on fixed, XX, don't of maturities year. we most and significant our in is have

mentioned future. prior As call, our of for in assumption our XXXX incorporate growth foreseeable NFEPS guidance and NFEPS for guidance rates the long-term interest high our fiscal

call I'll Steve. to back turn the that, With

Steve Westhoven

Overall, Roberto. portfolio complementary our the the our integrity reflect and these results Thanks, high businesses infrastructure. of value of of strength

a derisking more a on earnings top our net is base end peer rate are our predictable financial of group. growth We with strategy the of delivering at providing that of results,

In want resulted our all to employees upside in energy recent have hard of in their our thank in years. that targets take of And and advantage markets opportunities addition, able contribution. been I finally, work considerable we've to growth for to

NFE X% dividend support that expect and year. efforts produce will drive strong of per our will We X% our these growth to cash flows

that, the with open questions. I'll call now for And

Operator

Shank. first Chris from from is question Our is Ellinghaus line Williams your now Instructions] Chris, Siebert [Operator go ahead. Please open.

Chris Ellinghaus

landfill good IRA. for Hey. gas this sort markets thinking renewables. A RNG. in there things of have investments? the things everybody. I'm your happened some There's at quarter of about the Thanks for changed and morning, of renewable Have outlook these generation morning. strategic attractive with Good lot EPA and out very any like

Steve Westhoven

for good question. the So Chris. Thanks morning,

like into company market energy time that certainly I to bringing and developing earning the opportunities think a talking present a of that clean we've long it infrastructure, about been and the has capabilities will for evolving returns. service ours

We're solar been of is in IRA So division. part that developing the that. solar. we've support It's supportive the And world. of in got

developed subsidies plant, they're makes as well all the where to at this see nothing in well, to look certainly investments when we're in hydrogen. you the the make market. there. significant this together, for sense We announce RNG part towards IRA, positioned put and us it and hydrogen certainly a looking grow And we're to and But of take

to firm And winded become in see them certainly, CapEx saying, to opportunities out. we'll way do that dedicate long of we investors. the that, we'll we with share continue we and yes, So search that the more as

Chris Ellinghaus

sort Transportation some But incrementally. Okay. surprising give had on on of us little you press you between Great. noted the release opportunity And impact. quarter? in were There maybe quarter that? operating in color Adelphia color At some were Elliott any there. a that give the a beyond slightly assets obviously, the for sort of you side, Can things Elliott's of northern costs. you Gateway provides the Storage CEV, the us Can Storm southern couple also, and reduced &

Steve Westhoven

Yeah.

you make Energy all from you we the the the incentive in prices their We're programs. energy But up I the had company. profit in we're to value headline has as Gateway advantage new able bumped able Services Electric certainly announced and also signing Adelphia get certainly that. that demand services. services up to volatility. that ability outsized more short-term infrastructure, was think points We customers for increases just energy broadly, to their from profits so of saw And River gains towards of well contributing energy, today. that. infrastructure. take utility an CEV, Leaf for to was as at it

Chris Ellinghaus

CEV us any higher give electric think? electric color side commodity megawatt the that or side, you on you on revenues? more the Can do that more Is on increased was the

Steve Westhoven

I'd say commodity side. electric the in

Chris Ellinghaus

Appreciate Thanks the Great. color. Okay. it. for

Steve Westhoven

All right. Thanks, Chris.

Operator

Sunderland go ahead. Please Richard open. is from is JPMorgan. question next from now your line Our Richard,

Richard Sunderland

I you just and hit the to guidance this Hey. the that Good little the know & you're leaving or of the any outperformance more, your raise, to for there already, full Storage of unpack for amount Services if right the morning want saw, year bit original you little Energy cushion of of are guess, thanks that $X.XX and Transportation or that NJNG, it today. you I the remainder but a a plan is either now? bit the raise is versus across -- offsets time outside guidance kind

Roberto Bel

is How morning. performance on utility Energy This you BGSS Services, from also but also higher with not from your our from you? coming the Rich. Roberto. from that and Hey, coming & came right? question, It primarily the it Services, saw So Transportation. was Storage Energy incentives are only was Good

most broad-based of as from really the once business. businesses. part came and biggest again was our in from remarks, indicated coming it our our marketing So But

Richard Sunderland

Okay. here. CEV Understood. then turning And to

there guess exclusivity. kind a that the you also megawatts Jersey you this on years and the know laid think I I service. if the the I correctly in XX light front place 'XX, developments of was earlier? on I'm see XXX shift I are Just referenced first landmark megawatt here other and or of part, those project change PJM projects across there there. timing in contract referenced a 'XX the New out reading and changes Is

Steve Westhoven

least look going you X I gigawatt think at investments, look periods yearly you go of up say, we when about basis them, the is Rich, or a down. and of the -- number way and So we at Slide that describe total that look X to at potential at way the that or to that it's on the that

get projects they in, completed. As come

of come this projects some of can these sort exclusivity numbers and more down. part put we a firmer that commitment that As up go them to or chart will

number And we've is, solar But yeah, other investment. to at to investment think big then I robust the our for pipeline that very numbers look at we're CEV got the are in XX also, big able of a service. put megawatts

money, moving in service them this to we're we're the projects, pipeline business investing into completing develop then and unit. putting continuing we're we're So forward

Richard Sunderland

helpful Maybe a it. Got color. That's follow-up there. just quick

progress PJM well. positive the referenced from and you with So as New Jersey

Just that offer incremental forward can over level? high or PJM there timing curious that said kind of guess, you're might are the for, going institute? the you what else the here you or level I unfold level outlook how and from from this Anything both for this watching expectations. clarity for on milestones What looking year state front into each

Steve Westhoven

in she with Cradic PJM Yeah. of details of the can CEV, going manages process Amy to And I'm certainly our non-utility and to some and the that businesses and state. ask she associated the speak answer question. process to the

Amy Cradic

dependent But and production, fully those. competitive our positive. reform the say they're I very Yeah. Q PJM would both not BPU CapEx solicitation, on they're that the

still I'll give for about roll in do programs a our examples some we're we've for metering. of TREC policy waiting state few virtual approvals out. other net to the projects you with So and spoken past use

So opportunity our for we'll positive, pipeline. the of and all that, watch out continue optionality we additional progress see and to

Richard Sunderland

it. today. time Thank Got for the you

Steve Westhoven

Thanks, Rich.

Operator

question your Gabe, Moreen line is Please open. go now is Mizuho. from from ahead. Our next Gabe

Gabe Moreen

there I Can morning. proven over customer I Thank XX potential? think and months. I call names think you. storage it, has of last, midstream out think, Good Leaf have the the expansion interest talk again clearly out itself you maybe and some the now, some about time value talked about, River

thoughts latest expansion lease looking the on curious, is what just like? So

Steve Westhoven

and So in place. is a Gulf evident Gabe, there. down along movements taken with market the the announce market. certainly the development nothing of the that of that It's amount dynamics by have constructive to certainly, volatility and we the LNG have that's But very price Coast, area needed supportive balancing

provided there, we've fashion. this that we that nothing that looking it supportive market time. certainly to a very always again, But it's in certainly at got the talked make about we're we've where And can support So expansion. can customer investment that's capital but announce, in a point

Gabe Moreen

Thanks, Steve. so to of come prices here gas impacts you I can maybe little talk multi-faceted Can a if a business, having the question significantly. on ask down bit just And guys Because fairly debt whether winter bad inflationary on anyway. going pressures the that know kind expense, also coming of and insulated prices I strategy just forward? the less you hedging gas were into about

Steve Westhoven

Yeah.

I think got the well talk storage in well place still a And the impact strategy about price we've hedging market. pretty fixed that's gas really just going put when That hedging forward, strategy. ahead to now. rigid to volatility itself aligns being would able of in the to

we so expect season, So to that, into for us speak. our roll be I would as helpful next hedging that would

just this house Energy certainly beneficial then volatility, ultimately, way it that unit supportive going shows in if prices And continues resilient. up goes heat will And energy. economic But that market and it down gas forward be through in can certainly direction the enjoy, as our to it to overall and (ph) business of through and and us pricing an your lower is our such. customers provide hopefully, and Services

Gabe Moreen

Got additional it. is one if around like to comp of And in guess, here? could offset outperformance S&T Thanks, that so in the Steve. G&A if may on some say of that holds more be XQ that of an just that to outperformance. or and XQ really expense outperformance I rather that accrue, XQ O&M squeeze you'll Is I kind it stuff some the fair sort

Roberto Bel

Yeah.

right. you're yes, -- So

and expenses highest. seasonal tends be you to exactly to labor QX Our the as related out, are pointed

Gabe Moreen

Roberto. Thanks,

Steve Westhoven

Thanks, Gabe.

Operator

now is Sam, your from open. America. Sam go question Bank Please of from Klau Our is ahead. (ph) line next

Unidentified Participant

Hey, morning. Good guys.

projections quick Just question financing your here. on a

haven't outperformance, that, increasing over reason financing within Just towards previous given sort your why QX's your And any of you're activity there why is projections changed? equity more relative to debt really also update? issuances thinking

Roberto Bel

Yeah.

cash projection flows. remind of about for talking our what our I So you we're terms showing in we're

guidance, range we the So even that we though within increased show we're there. we have our feel still

changed why that's haven't that. So we

no your So future, we that's to true today. block versus question as the remains then number equity in have issue and before, have And one. we on that equity, plans stated near debt regarding any

Unidentified Participant

Roberto. Thanks, it. Got

Operator

Partners. Instructions] Shar Please line go Guggenheim Pourreza Our from [Operator is next from Shar, open. is ahead. question now your

Jamieson Ward

Jamieson for It's guys. Shar. our taking questions. for on Hi, Thanks

Steve Westhoven

Hey, Jamieson.

Jamieson Ward

Hey.

responses you far So the just wanted to and answers helpful thank clarify so for a to expand couple and wanted of bit provided. on prior a you

quarter, and aspect expand off, wanted to but First again, clarify. seasonal and of guess I the fourth the just

gas looks stronger lowered despite raise for the entire the actual guidance for the basis on an year the company. despite and year-over-year it for for quarter, at customer higher you EPS the first So the the growth like utility, $X.XX segment earnings

any But for it's us new Could and looks just expect guidance lower now O&M then pressures other $X.XX the guidance. on it for your expectations like the or that? based remind a you And November have of about and for I follow-up. the baked was $X.XX year you that higher inflationary on segment, the into to what weightings versus potential the original drags

Roberto Bel

morning. Good is Roberto. This

what lower. absolute percent think the is the business utility our you're are lower our much presentation. breakdown of lower, to the basis, show BU so not because utility, but be right, in -- the breakdown the we expect is I NFE whole to So is And that higher, you reason we right? do by that's that's referring an the on for

Jamieson Ward

up did $X.XX each, But not and of and going or took $X.XX then just each XX% XX%, and a that's -- $X.XX did the midpoints then where the XX% by anything. or and the off compared of the the to also I'm top Well, numbers averages by that those revised came I $X.XX to XX% -- separately with by $X.XX took the and by I lower. bottom that to $X.XX and then okay. original and took then

So is that's it? there way -- different a at look to

Roberto Bel

Yeah.

that So to we can explain take off-line that.

Jamieson Ward

Sure. No problem.

Roberto Bel

for look original no If range based you at you changes. what range would $X.XX see on guidance are and there the guidance that to absolute to $X.XX% really were an basis, on we're showing equity the of today,

Jamieson Ward

Okay. Yeah.

next, kick $X.XX to coming it with absolute from okay. Let's yeah off-line in up just no, changes that's But lower -- the to one $X.XX then. I was but

$XX looks the EPS on quarter just the but million million on So year After contribution ago, contribution moving AMA follow-up in the year-over-year, out $XX here, by a this the from $X.XX a the backing Energy roughly specifically Storm not Winter add I'm business as you side. improvement mostly same get quarter Elliott. and to had I almost of like other contributed And Services, driven the also an the outperformance. looking just parts that

But of been a since given in like now start only a buffer November for you that encountering. buffer you've pressures everyone about drags your envy the when year, by, left you very of in Could back walk or that given worried just very, it cost seems $X.XX through gave inflationary and are other that earnings you us the less guidance that to you pressures the lot that presumably sure peers you and so guidance have half is that of top had you of of potential year? nice lot another something raise couple narrowing there, so still use to got a I'm

Roberto Bel

Yeah.

as about at how So is the you tend timing think way changes, maybe demand you right? Energy you're is especially so think thing -- about, to the have that charges happen. their coming Services the first They from happen. talking to to It's address buffer

is the we're there electricity prices. then part year could that lower timing what you're generally so second affecting revenue, And where about a that now, change there with cautious are just happen most especially right of are the buffer the for part the So in discussing.

Steve Westhoven

Yeah.

buffer you've to I And or here. describe not as seasonality guidance put might just that, the the our I in a number numbers to the it buffer, to with a together. agreement -- there's there's think way add I that think to that's I'm that associated

Jamieson Ward

kick you're a year the can in to We a off enough. way, have Fair like place seems thing Either seems Okay. up it to and like with. follow good good off-line. it

that's why So was I asking.

Steve Westhoven

you. told That's what we

Jamieson Ward

Absolutely. Yeah.

Just final question Ventures. Energy on a Clean

in a the are range to here hone you remarks year another have to in prepared you're expect on in to You as have just that the you're final visibility the There's narrow the sense When be we the that year that tighten question, level you But fiscal mentioned already. so able for the better just the order what timing? of the looking quarters to currently to of gating ahead. it next require the range question items and waiting in thereafter? on do

Steve Westhoven

before, project and But PJM on state of the she talked programs there, for So dependent cube the some when guess, answered resolved. not solely reform that certainly those Jersey. about that we've the New Amy of question mentioned the being, and I in shown they're pipeline

new a got developments that confident reform get in invested. not to the dependent to at be your positive not, at able capital please clarify. to question. we've our least Q taking to So program get on solely we'll again, feel If we and that answers that in execute capital But hope completed. the programs state programs I be certainly place other those order

Jamieson Ward

of No, two or thing. that trying up Yeah. sort just now sense next you. But a that a covers quarter get sort think follow further I can quarters it, or I off-line. of whether it's from to of Got was and

Steve Westhoven

Okay.

Jamieson Ward

and Thank year, the good you to guys. Congrats. much very start

Steve Westhoven

All right. Thank you.

Operator

next Travis, is Miller Morningstar. question line Travis is ahead. Our Please your from from now go open.

Travis Miller

Good Thank you. morning, everyone.

Steve Westhoven

Travis. Hey,

Travis Miller

AMAs, that this much how you during the there wonder on there about the I that of volatility expected in like earlier, in AMAs but performed performed to I touched Just that or contributed Services? apologize if how you didn't talk Was you quarter. wondering on How could the Energy expect? if the quarter.

Roberto Bel

This Travis. Roberto. is Hey,

And to was to And we AMA of were in before year, expected that be million. million. for the year. That those AMA, last those revenues similar for cash QX, QX. to corresponding going the about the $XX the the $XX said already So are received we revenues all

in as question exactly a nutshell, your it we answer expected. to performed -- it So

Travis Miller

could the any have kind Okay. of where optionality year get or either any detriment? during you in those of Do around kind place you

Roberto Bel

we price On pretty much this is so contract, basically have AMA, this discussed, no. specific as a fixed

Travis Miller

much. very you Thank Okay.

Roberto Bel

Sure.

Steve Westhoven

Travis. Thanks,

Operator

We currently questions. further will team. management no now have back to hand I the

Steve Westhoven

you. morning. this all of you like I'd Thank us to for thank joining

reminder, interest in this we appreciate for Goodbye. always, available investment a of your website. morning. As recording and is replay a NJR. on as a Have call our good And

Operator

Ladies gentlemen, today's for concludes and this you call. Thank joining.

Have now disconnect lines. good may You day. your a

New Jersey Resources (NJR) 2 Feb 232023 Q1 Earnings call transcript