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The York Water(YORW) - 2024 Q2 - Quarterly Report
The York WaterThe York Water(US:YORW)2024-08-02 14:13

Financial Performance - Net income for Q2 2024 was $4,993, a decrease of $1,531, or 23.5%, from $6,524 in Q2 2023 due to higher operating expenses and interest on debt [60]. - Net income for the first six months of 2024 was $9,320, a decrease of $857, or 8.4%, from $10,177 in the same period of 2023 [64]. - Operating revenues for Q2 2024 decreased by $17, or 0.1%, to $18,750, with total per capita consumption approximately 2.8% lower than the same period last year [61]. - Operating revenues for the first six months of 2024 increased by $2,210, or 6.5%, to $36,378, primarily due to a rate increase effective March 1, 2023 [66]. Operating Expenses and Debt - Operating expenses for Q2 2024 increased by $1,437, or 14.0%, to $11,688, driven by higher distribution system maintenance and uncollectible accounts [62]. - Interest on debt for Q2 2024 rose by $505, or 30.1%, to $2,183, attributed to increased long-term debt and higher interest rates [63]. - Interest on debt for the first six months of 2024 increased by $1,115, or 34.9%, to $4,306, mainly due to higher long-term debt and interest rates [68]. - As of June 30, 2024, the Company's total long-term debt as a percentage of total capitalization was 46.2%, up from 45.2% at the end of 2023, indicating a trend towards increased leverage [85]. Customer Growth and Acquisitions - Average number of water customers served increased by 1,007 to 72,304 in 2024, while wastewater customers increased by 560 to 6,499, primarily due to acquisitions [61]. - The Company signed an agreement to purchase wastewater collection assets, expected to add approximately 65 customers in 2025 and 230 customers in 2024 [73]. - The Company signed agreements to acquire water assets from Brookhaven Mobile Home Park, Houston Run Community Water System, and Pine Run Retirement Community, expected to add approximately 150, 15, and 100 water customers respectively, with closing anticipated in the second half of 2024 [74][75]. Capital Expenditures and Funding - Capital expenditures for the six months ended June 30, 2024, amounted to $20,867, with an anticipated additional $21,300 for the remainder of 2024, primarily funded through internally-generated funds and customer contributions [77]. - Internally-generated funds for operations in the first half of 2024 were $12,841, a decrease from $14,596 in the same period of 2023, attributed to higher interest and income taxes paid [80]. Liquidity and Credit Management - The Company generated a cash overdraft of $2,154 on its cash management account as of June 30, 2024, indicating liquidity management challenges [78]. - The Company has a credit line of $50,000 with $1,461 borrowed as of June 30, 2024, and expects to extend the maturity of this line into 2026 under similar terms [82]. - The Company maintains a credit rating of A- with a stable outlook, dependent on timely rate relief and balanced funding of capital expenditures [89]. Regulatory and Risk Management - The Company has a deferred income tax asset primarily due to accelerated depreciation, with expectations of generating future taxable income to offset these liabilities [87]. - The Company has received approval to replace up to 400 lead customer-owned service lines over nine years, with costs recorded as a regulatory asset to be recovered in future rates [94]. - The Company has not experienced material impacts from cyber security attacks, although it acknowledges potential vulnerabilities and has implemented measures to mitigate risks [93].