SJW - Earnings call transcript Q1 2024

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Operator

Good day and thank you for standing by. Welcome to the SJW Group Q1 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your speaker today, Andrew Walters, Chief Financial Officer. ahead. go Please

Andrew Walters

and Welcome conference operator. presenting first XXXX Board, quarter with Thank for to SJW results President the of call Thornburg, be Executive Group. financial Officer. Eric you, Chair the Chief I today will

by would of the may the results could company's website implied and along, our company slides to well differ those current performance its forward-looking remind presentation website we sjwgroup.com.Before expressed on related begin the believes in results, other remarks For cause expected materials estimates the or to by on made implied would like available you like as under experience, this factors our to are company follow These forward-looking statements. historical statements the conditions posted who as you light the based and contain statements. materially on at Many actual future accompanying trends, or today, from assumptions are I our of that are that those factors appropriate and circumstances. and

recent press and actual and of today, you description filed statements. cause that to of could such we from to on financial this and be the different the results which factors and a revise some SJW our duty statements X-K with most disclaims refer XX-Q of update our are in For forms results Exchange obtained or as Securities XX-K, Group presentation, of may release website. statements be the Commission, copies made All to forward-looking any

of XXXX. as available webcast reminder, archive the an until recorded of be opportunity to the And this As July and questions a being ask the have XX, you end an at will webcast will is presentation.

call and the You can corporate the website.I Thornburg. at webcast will to the Eric Eric? turn now press over our access release

Eric Thornburg

I'm Thornburg public President is environmental pleased is Welcome, CEO that of environmental joining to quarter My commitments, and customers. and Group. and provided Chair, as health thank and SJW met XXXX, water to and on of Eric everyone first you for water serve name the we drinking us. honor stewardship service and to quality share it in and my our regulations, delivered high

the a approval also million a by case our capital working first $XXX in an general infrastructure, million in constructively million the initiative XXXX wastewater save capital customers We to expenditure We reduction and surcharge of investing utility XX% approximately share for year regulators scale and which delivered strong foundation with cost in in and $XX avoidance by of to Maine laid benefiting anticipated and an and through infrastructure $X.X sourcing executing in water secure our per our $X.XX cost constitutes national plan leveraging diluted earnings quarter. Texas, rate of XXXX.

progress on We our our will will talk executing our the and in more solid operations. now updates a being about plan.Andrew strategic force as made financial for good this and regulatory of results Andrew? state review part

Andrew Walters

XXXX. able Despite $XX.X quarter our to Diluted water higher reported $XX.X a expenses, the X% the in reported revenue the have was Thank the results. noting was compared share per over the we of protection reported EPS a rate increases. both $XXX.X deliver in $XXX.X XXXX. California quarter Connecticut driven million of the our quarter is of operations for close, first place. largely released Last million by to It also evening XXXX increase first operating of The net first $X.XX and over after million, you worth Eric. quarter million, In XXXX. increase market X% mechanisms $X.XX income revenue increase production quarter, same we were in in that we

recovery infrastructure Connecticut. in expense. increases of the can also by as water As and contributed driven and were $X.XX water was California production adjustments the primarily rate increase well million the attributable offset increase customer by Higher revenue $XX depreciation higher production $X.XX. on The usage infrastructure in was of see, mechanism and usage revenue as $X.X and revenue you growth.Moving to increase the amortization, higher expenses. and to costs, million interest rate was and from Maine

program.At was advances decision $XXX of emissions Our of water as social Total amortization $XXX advanced were leaving replace customer X, CPUC's was the at-the-market our borrowing million leak from had from Utilities were the California detection. credit, principally quarter and for borrowing the financing higher production Water storage XXXX $XXX period XXXX advancing million rates expense first well needs, diesel acoustic that to through to US XXXX justice application increases case Public in and environmental our Jose California. $X XX% bank for by through a EPA, water available And of for rate plant electrification and quarter The water energy million credit rate generators, Commission of quarter X% finalized primarily capital during quarter XXXX. by operating average to we to increased plan additions $XXX and increase proposes expenditure drinking rates other rate end the fleet administrative we improve rate increases lines set activities. through approximately year-over-year. San systems and income XXXX as action cost. the gross solar will of recently filed in The greenhouse that X% generation, first in resiliency, PFAs compared The expenses effective XX% in tax quality The a effective proceeds million and high for The of reducing increased meet driven Approximately January early can utility our to our XXXX quarter application on XXXX, The and and including the general general higher and workforce addresses gas treating same the X.XX%. increase and standards our the drawn with wholesaler in key line approximately was the XXXX. short-term consolidated raised operating was January of program approximately usage depreciation in the first several X.XX%. average three quarter, million year, The respectively.On economic be come access XXXX. water as development. as X, service, fourth and climate on and was

actual to balancing X, escalating Water us manage As authorized a another the dental, insurance has San to of January and the between XXXX, of group opt-out the yet The Jose insurance This differences account capture that benefit cost. expense. and purpose and helps of the is medical, account. mechanism regulatory is unpredictable

opportunities a the customers.The our XXXX adjustment mechanism X.XX%. return an the of of authorized cost in to account equity future explore to due We point was expense effective X, ROE the basis benefit reduction for is January water will XX the less memorandum to The reauthorization optimize of water XX.XX%, on XXXX. capital conservation on

debt of and rate is cost X.XX%. is Our X.XX% of return authorized the

to For a that initial Class project reference, XXXX with three deferment accordance this X.X% a California place in infrastructure the X, CPUC capital extended filing.With equity filing up more quarter it On for of from the from points was as AA provision deadline of X, the the mechanism for cost water XXXX, the less memorandum other remains received February approval is and on decision, basis cost to our Index October the May water capital or May metering deferral in return our and Moody's of advanced conservation underway. XXXX.Installation one movements Water, of X, approval allows Bond points CPUC meters down in XXX X, XXXX year includes adjust water A basis utilities September XXXX. account. The of of XXXX, XX the for along or part with between in in first XX, XXXX Jose XXXX smart San

that is rate utility We AMI authority. in million million our case to between before is XXXX.In the planning $XXX application invest public the XXXX regulatory majority general rate is general are case in $XX capital the is of approximately budget separate the Connecticut, from This project and expected a XXXX. and installation pending project the

requested connections. of projects. to the approval million agreement Biddeford-Saco of $XX.X $X.X rate the stipulation assumed thirds annual XXX not on increase to rate our by type debt return infrastructure of States, area of surprising River water in continue Maine Census strategic the connections XXX,XXX and had cover to Public Rockland filing located out agreement Bureau. a company's The in With surcharges.A the more on offer first this case water is example our infrastructure July We program. March state decision utility proposal wastewater program. the program. approved XX.X% Approximately quadrupled in the general growth approximately increase of for surcharge about potential rates June in is generate the for the requested through approximately or two final Biddeford-Saco or connections surcharge new be of strategy the this stay-out as opportunistic organic water connection in a is San expansion expanding growth January and effective serves fastest investment include as in any Camden important the strong to The the water On One to assistance strategically XX,XXX provision its assistance water Division, in The Maine rate low interest number application includes authorize X, expected and system expected with filings. within rate County. Our to rate is which We're infrastructure and wastewater revenues. were XXXX, units case The our request we increase connections that prudent will is since approved the an is construction revenue connections related X,XXX division water PURA late Texas the with infrastructure XXXX developer stay-out include apply on in between effective Water Antonio, company January Water's and Texas, It XX% water annualized securing Maine to structure equity Austin and in robust to service of Maine for increased also Water not and Maine a service momentum structure. evidenced see does Center. units. the is Division our new capital approved acquisition the to X, counties ROE Public MPUC This Water resources. The United borrowing annualized expenses continue the according million. is development and growing XX,XXX Commission X, of intend for capital future five the serves Office territory. in with division Water's following The to Saco of the Biddeford-Saco by increase Drinking from increase the applied Utility provisions costs Other between expected operating and XXXX, XX% Advocate. of of on for Resource approximately income to currently service We XXXX. has general XXXX.New this through with for XXXX. XX, X.X% area of Texas outstanding water revenues.Turning revenue equity, than will also hopeful Comal Water were acquisitions, US stipulation three Connecticut

add system since rate Our in improvement a is increasing case thereby expected Commission application to quarter charge a XXXX certain The to XXXX to in XXXX. base, before Water March decision Public Texas avoiding made and XXXX.On acquire of the Utility rate for decision additions general XXXX, utility in and approved plan revenue our its of pending the the Texas application PUCT third Texas. XX, is a authorizes

We $X.X US severe Texas billion.The to annualized classify service Drought as revenue Monitor continues our an drought. increase to moderate being expect of in area

X%. base growth that we supplies, in water is income pleased we and usage Water's diluted reaffirming water $X.XX long-term business XXXX acquisitions, which wastewater targeting increasing growing expect our guidance consolidated with of additions drought and are With use reductions contributions voluntary diverse the its lower earnings are continues. XXXX organic remain and growth the Overall, with consistent of to rate share, to customer vary Texas per of X% water to net drought a our continued on conditions. We portfolio about of non-linear if prospects.We a and local optimistic through are $X.XX

Biddeford-Saco Eric. regulation. XXXX. strong XXXX equity approximately $X rate issuance I'll strategic of the contributor decisions capital million, is XX of case we regulatory properties program. that $XX growth remediation of million which X.XX% return The underlying note increase and which WCMA regulatory million contaminant reaffirm is prospective of diluted our in investment $X.X and our case California the a capital reduction XXXX equity estimated approximately to long-term with is in completed guidance our the structure in of stated maintain proposed billion, the completed PFAs X, Land acquisition expect based which impact Tennessee is is We consistent our call Constructive million, share sale the on XXXX, rate of January XXXX, over quarter January growth equity, reinvestments $XX maximum on ROE the to anchored $X.XX, reimplementation include guidance investment includes as to current X, on in support that, X.XX% nonlinear business Further, basis X% The XXXX. warehouse off outlook levels of is factors long-term of filings, five to or a rate.An of gain because $XXX cycles.With sale in the April and to range pretax for a effective not the debt turn in the of excluding of We to capital earnings the estimated was on a XXXX SJW our point growth XX% rate our important the $XX previously year million. earnings. for net effective building guidance first X% Company XX% per X.X% The

Eric Thornburg

United Thank regulations standards with allowed maximum supports to you, month, in the the States compounds. PFAS monitoring, reporting EPA. Protection PFAS by these levels Andrew. and compliance new being committed for the full timeframes and Earlier six contaminant is issued Group for SJW Agency final strongly within for standards this Environmental

Maine, treatment the million of to within actively that five presence in neighboring we In utility California billion expenditure $XXX supplied plan. we have operations is detected in system Connecticut, have our will additions expect where address PFAS recent we approximately $X.X capital That which estimate the is by is system PFAS. our currently for water most for fit Our water one and nicely capital situation. a year working

of We been manufacturers. the It's our We from to receive costs ultimately us as and early these when, polluters in and our we local also customers.One several pursuit customers, deliver will SJW and have contaminants the the PFAS measure our pending communities, passed Scope for are force environment. tell Between our continue for company XXXX, Group gas agreements committed to parties our we approximately impact emissions our holding our on how values to XX%. the settlement but the settlements success and core how treat a the to of responsible and and we help X or will XXXX to a good. employees manufacturers settlement with too much we or cost to ways is use reduced greenhouse to by X benefits Scope minimize

prestigious is appreciation, in utility high proud purpose surveys also development XXXX Operations. based decades welcome We live, accredited to of meaningful to their corporate professional express to service. Commissioner, forward and work our in be serve. this to the exemplars extend Baker is gratifying Genevieve when ANSI data and a for Excellence excellence and and as named Connecticut Public was and address who index firm Workforce us where to What for recognized Commissioner working with Newsweek ISO at XXXX. California top outgoing appreciation water to a audited company Shiroma reported commitment fantastic values.Our utilities.I her character South USA California's Baker, leadership of XXXX Inclusion with will for Matt our Index an very several issues marks the on had the from the related with she here to San Commissioner, like in that, Board Utility to a California. testaments Grid to familiarity company Bay and Water to four of communities, awards of practices She Accreditation stakeholders solely National gave public in Company. make being Electric and facing Prior responsibility and our ethical Jose financial servicing her addition most We by recognition the peers social look to and water communities the comes where XXXX pleased the have we and roles in organization us the are standards. Both Distribution as employees Vice-President growth, We're Moniz-Witten she leadership the our results for best Her for of and that is under TODAY. would her a USA Field good business welcome team. and XXXXX. customers, President qualities, a commitment of am Gas Electrical values in extremely is Our been Area to have by anonymous by force had deep was Tanya staff warm his National Pacific the to

SJW our I'll to successful and call our questions. for position deliver value shareholders over of ability teams as environment the the and commitment they footprint our core our enhance Abernathy connections Riahei our essential I've build the managing to mind Communications I'm people SJW across and She for trusted integrity, We that, to excel service at served meaningful makes with a also the a McGregor. nationally.As Group. background future.And confident for our has with reinforce Group stakeholders as before, help continue back an its communities, skills and and contributions its most to our our and customers expert recently a stakeholders SJW continue communications and operator brand strong to provide I difference and values welcomed upon be turn recently consistently Vice-President our of the of by as Nazan to at national inspired will customers. reflects are what the who serving for to talented Group. elevate director team's SJW peace Group's reliability She's with shared

Operator

question JP Richard first comes Our Instructions] Sunderland from Morgan. [Operator with

Richard Sunderland

Appreciate couple being and I on the attention how feeling your here peer denied you, Maybe and into. you're appeal litigation to about comprehensive overall. of this case rate on, going updates foremost, different been with and things recognize there's Aquarian's a curious but first there. backdrop Connecticut the Connecticut dig the isn't more

Just how in the backdrop the pendulum do and state overall you feel about regulatory the currently? utility

Eric Thornburg

many the for And to for as customers an for small well. invest learn watching and years the problems able utilities. we water case rate remain Connecticut those return and by was solve the in Aquarian to Avangrid's for for heart very a problems solve clearly regards a state cases to sent. capital and regulation We studied acquire and to results earn really utilities exceptional and many, utilities I were and that lot Connecticut took were of of them and water case, the optimistic messages

team I are Connecticut an saying I that did our process. don't want think so we the think, in don't in And reimagining job the regulators investment Connecticut, state. exceptional

really to they're that what think why tell us and you up we I you back sure make saying it, exactly justify is it they're want needed, thoroughly.

exceptional to we So we'll on know bills. well together, We of climate the we information May need just proud changed did. and the decision to has said, so -- we've so additional team. taken utility And that And I'm just everybody like XX, has regulatory case. a reflect draft that expect I an heart. our put think address I affordability concerns the I regarding think for how there

fairly that expect do so we be we've there. very learning treated So outcome. applied we a constructive have and Richard, we that learned that I lot, very hope will

Richard Sunderland

the all you color. Thank for

to could usage guidance trending are the a speak high level, Texas, curious, to little I relative how ramifications? drought things a from assumptions? relative the bit I'm guess to more you Turning to trends

Eric Thornburg

meeting, then first But see this start ourselves. were to in earlier Board in specifics. week our to for we Andrew just I'll it we and were I'll able quarter for Yeah. and ask cover Texas

that recent there, is which Lake, managed particular Canyon there's and is historical by GBRA that below Texas. levels of mean, it's so drought I Our in the -- area substantially significant

is looks the heart red big rest just the in state pretty there. but good, So of it's the right a The of actually threat of drought state kind zone the real.

I our our So it Texas we're prepared indeed business will summer, an Andrew? think taking that have and impact there. for on be this actions to

Andrew Walters

it -- and I different range today. from would that's think you add, of outcomes our And Eric. bounds a I from those Yeah, took weather our into that we're forecast perspective, stands Rich, summed a as still just perspective, well, within it up we

will our So where at the about update unless but feel overall good more relates still something changes significantly we to in as you, it we we're forecast. future,

Richard Sunderland

the the clear, And change then one or that's sales in script reflective real be if may. I activities, transaction or I estate language of on Tennessee you portfolio in referenced in going around there M&A that just The myself, guidance in process? final is or, language, addition backdrop from see one of the of changes you the slide, should is independent anything of terms else the have I in

Andrew Walters

subsequent that's out. are the But spot where No, which more business are, perform I the specifics you've to we where queue once of in properties the expect related judging again, our off really those disclosed fully of. it hit I transaction it's earnings the the Tennessee guidance what ourselves It's on. And on we event at. be that's the anybody to that -- and and we're didn't core want confused to and described

Operator

Instructions] next One Thank moment question. out [Operator you. for

with UBS. Our question Orrill Gregg comes from next

Gregg Orrill

May to or settlement regard prospects there due Connecticut? about decision a partial are are With there's draft are What Connecticut, Hey. any XX, in that? for your recognizing thoughts -- settlement there

Eric Thornburg

and and evidence there so their decision. Yeah. weigh commission up now It's not. have really the the -- and No, it's are written have to the briefs been concluded just proceedings to write

Gregg Orrill

do rule company And sort of for liability of Okay. the think you on sort how the pre-PFAS about that topic? legacy,

Eric Thornburg

Well, Richard. I'm Gregg. -- as we sorry, disclose Go ahead. sorry, I'm

Gregg Orrill

Thanks. it. That's

Eric Thornburg

we there. California line the your capital good newly address have very Okay. understanding Hey, Connecticut. standard what and in the to Apologize are for needs both PFAS of a stepping on promulgated

even underway Connecticut. now in We have projects

a by the we'll have of think we already So addressed. year, of of -- the wellfields end couple couple

of regulatory confident those that a spot like and feel we're receive very there recovery capital in we we'll so good And investments. really

like state as we've and start the a feel got well California. good in really in so And

conclude time is to projects EPA to optimistic ability very which about So our by the well before five horizon provided our year achieve compliance.

Andrew Walters

the with just the might the where other too, add actually be thing to obviously Eric mentioned out total over have in room so and other inflation an in us factors I on other are recover money time, his create on of customers was are Eric, we off any amounts to confidently bills comes based discussion that to estimates without ways But could focused ways save that other well. we diminution that in that impact the time. can this the that, to and our capital projects as

Operator

I'm at questions to remarks. Thank time. for now Thornburg, Executive further this you. would showing Eric no back Officer, closing it Chief to I turn like

Eric Thornburg

for everyone you, today. us Thank joining

as As strategy advancing SJW rate we much make proudly you serve PFAS look million high our have do we recognize our much, and on which solid I, growth success. across leverages the capital the you to Texas, case local forward we our and I four their straight make have it's operations your XX And people communities deliver to that and local the dividend, including years. acquisition forward to it's available this, next of in water XXXX, And Andrew and mission group. in to that AMI dividend and faithfully And who that quarter our national shared more been sourcing it we strategy to look the customers states. along into have year quality our our a And meantime, always for while remediation sure I'm people that Connecticut, initiative In execute culture a years. raised growth SJW in execute implementing continue we done in consecutive follow-up. proud group start to with more. we our close the shareholder lot XX of to for rest Group our in our a are we've support SJW team our platform realizing sharing and very again of underlies our strategy. the XXXX value, to California, interest possible. Thank service and finalizing for paying for $X.X national including to our we heard, progress pursuing all you we of with initiative

Operator

This for conference Thank participating. today's you concludes call.

disconnect. You may now

SJW (SJW) 26 Apr 242024 Q1 Earnings call transcript