California Water Service(US:CWT)2025-05-01 21:11Financial Performance - Net income attributable to California Water Service Group for Q1 2025 was $13.3 million, or $0.22 per diluted share, down from $69.9 million, or $1.21 per diluted share in Q1 2024, representing a decrease of $56.6 million [95]. - Operating revenue for Q1 2025 decreased by $66.7 million, or 24.7%, to $204.0 million compared to $270.7 million in Q1 2024, primarily due to the cumulative adjustment from the delayed approval of the 2021 GRC [96]. - Total operating expenses decreased by $11.3 million, or 5.8%, to $181.6 million in Q1 2025, mainly due to a reduction in income tax expense [97]. - Cash flow from operations for Q1 2025 was $38.4 million, up from $26.5 million in Q1 2024, indicating improved operational efficiency [116]. - Net income for Q1 2025 decreased due to the prior year's $111.8 million operating revenue from the MWRAM and IRMA, which was not repeated in 2025 [117]. Revenue and Rate Changes - The net change in operating revenue for Q1 2025 included a $21.4 million increase from rate changes and a $3.8 million recognition of Palos Verdes Pipeline revenue, offset by an $80.7 million decrease from the Interim Rates Memorandum Account [96]. - Proposed rate changes aim to increase total revenue by $140.6 million (17.1%) in 2026, $74.2 million (7.7%) in 2027, and $83.6 million (8.1%) in 2028 [107]. - Cal Water's proposed Low-Use Water Equity Program aims to decouple revenue from water sales, enhancing affordability for low-use and low-income customers [106]. Expenses and Costs - Water production costs decreased by $1.2 million, or 1.9%, in Q1 2025, primarily due to a decrease in Incremental Cost Balancing Accounts (ICBA) expense [99]. - The company recorded a decrease of $14.5 million in income tax expense for Q1 2025, attributed to lower pre-tax operating income compared to Q1 2024 [103]. - Other operations expenses increased by $1.9 million, or 7.1%, in Q1 2025, primarily due to inflation-related increases in various operational costs [101]. - Depreciation and amortization expenses increased by $3.1 million in Q1 2025 due to utility plant placed in service in 2024 [102]. Capital Investments - Cal Water plans to invest over $1.6 billion in its districts from 2025 to 2027, with approximately $1.3 billion allocated for new capital investments, focusing on replacing aging water pipelines [106]. - Total capital expenditures for 2025 are estimated between $450.0 million and $550.0 million, reflecting ongoing investment in infrastructure [120]. - Utility plant expenditures for the three months ended March 31, 2025, totaled $110.1 million, with an estimated range for 2025 capital expenditures between $450.0 million and $550.0 million [139]. - The company estimates a capital investment of approximately $226.0 million will be required to comply with new PFAS regulations by 2029 [145]. Financing and Cash Flow - Net cash provided by financing activities in Q1 2025 was $65.9 million, compared to $86.6 million in Q1 2024, indicating a decrease in financing activity [121]. - As of March 31, 2025, short-term borrowings amounted to $285.0 million, an increase from $205.0 million at the end of 2024 [126]. - The net receivable balances for IRMA, MWRAM, and related mechanisms were $121.7 million as of March 31, 2025, up from $57.9 million in the previous year [123]. - The company has a syndicated unsecured revolving line of credit of $200.0 million, with $150.0 million available as of March 31, 2025 [137]. Assets and Liabilities - As of March 31, 2025, total assets increased to $4,782,552,000 from $4,712,571,000 as of December 31, 2024, representing a growth of 1.48% [133]. - Current liabilities increased to $527,239,000 as of March 31, 2025, compared to $471,432,000 as of December 31, 2024, reflecting an increase of 11.83% [133]. - Construction work in progress was reported at $378.4 million as of March 31, 2025, indicating ongoing investment in utility infrastructure [140]. Dividends and Shareholder Returns - The quarterly common stock dividend payment was $0.34 per share, up from $0.28 per share for the same period in 2024, reflecting a 21.43% increase [134]. - The second quarter dividend of $0.30 per share was declared, marking the 321st consecutive quarterly dividend [135]. Other Operational Metrics - Average annual groundwater extraction from adjudicated groundwater basins approximates 7.8 billion gallons, accounting for 14.9% of total average annual water supply pumped from wells [142]. - Book value per common share decreased to $27.35 at March 31, 2025, from $27.49 at December 31, 2024, indicating a decline of 0.51% [138]. - Cash contributions to the employee pension plan in Q1 2025 were $2.3 million, with an estimated total contribution of $5.2 million expected for the year [118].