MDU Resources (MDU) - 2025 Q1 - Quarterly Results

Financial and Operational Highlights MDU Resources reported strong Q1 2025 results, driven by regulated energy segments, following the Everus spinoff Q1 2025 Financial Summary (vs. Q1 2024) | | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net income | $82.0 million | $100.9 million | | Earnings per share, diluted | $0.40 | $0.49 | | Income from continuing operations | $82.5 million | $74.7 million | | Earnings per share from continuing operations, diluted | $0.40 | $0.37 | - MDU Resources reported a strong start to 2025, driven by its regulated energy delivery segments. Key highlights include: - Pipeline segment reported record first-quarter earnings, up 13.9% - Natural gas distribution earnings increased by 11.5% - The company affirmed its full-year 2025 EPS guidance of $0.88 to $0.98 - These results support the company's transition to a pure-play regulated energy delivery business[2][3][4] - On October 31, 2024, MDU Resources completed the spinoff of its construction services business, Everus. Prior period results have been restated, with Everus's historical results now reported as discontinued operations[3] Business Segment Performance MDU Resources' Q1 2025 performance varied across its Electric, Natural Gas Distribution, Pipeline, and Other segments Electric Utility Segment Electric Utility segment's Q1 2025 net income decreased due to higher O&M and lower investment returns, despite increased volumes Electric Segment Q1 Earnings | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net Income | $15.0 million | $17.9 million | (16.2)% | | Operating Income | $18.1 million | $22.8 million | (20.6)% | - Key performance drivers for the quarter included: - Negative: Higher operation and maintenance expense due to generation station outages, increased software/insurance costs, and lower returns on nonqualified benefit plan investments - Positive: Increased retail sales volumes (+25.1%), particularly from colder weather and a data center customer in North Dakota[5][7][23] - Regulatory activities include: - North Dakota: Filed for an advance determination of prudence to purchase an interest in the Badger Wind Farm - Montana & Wyoming: General rate case filings are anticipated later in 2025[7] Natural Gas Distribution Segment Natural Gas Distribution segment's Q1 2025 net income grew 11.5% to $44.7 million, driven by rate relief and colder weather demand Natural Gas Distribution Segment Q1 Earnings | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net Income | $44.7 million | $40.1 million | +11.5% | | Operating Income | $68.5 million | $58.3 million | +17.5% | - Earnings growth was primarily driven by: - Rate relief in Washington, Montana, and South Dakota - Increased retail sales volumes due to colder weather - A 1.5% year-over-year increase in the natural gas customer count[6][7][24] - Key regulatory updates: - Washington: A multi-year rate case was approved, with a $29.8 million annual increase effective March 2025 - Montana: Interim rates of $7.7 million annually were approved, effective February 2025 - Wyoming: A $2.6 million annual rate increase has been proposed - Idaho: A general rate case filing is anticipated in Q2 2025[7] Pipeline Segment Pipeline segment achieved record Q1 earnings of $17.2 million, up 13.9%, driven by new expansion projects and strong customer demand Pipeline Segment Q1 Earnings | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net Income | $17.2 million | $15.1 million | +13.9% | | Operating Income | $26.1 million | $22.6 million | +15.5% | - The record earnings were driven by revenue from growth projects, including the Wahpeton Expansion and 2023 Line Section 27 Expansion, as well as strong customer demand for short-term firm transportation and storage services[8][25] - The company is pursuing further growth through: - A proposed 375-mile Bakken East pipeline project to meet forecasted production growth - The Baker Storage Field Enhancement project, which would add 72 million cubic feet per day of new firm storage deliverability[9][10] Other The 'Other' category's net income significantly decreased to $5.1 million due to the Everus spinoff reclassification - Following the spinoff of Everus on October 31, 2024, its historical results are now reported in discontinued operations. This is the primary reason for the significant change in the 'Other' segment's net income[27][28] Other Segment Q1 Results | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Income from continuing operations | $5.6 million | $1.6 million | +250.0% | | Discontinued operations, net of tax | ($0.5) million | $26.2 million | (101.9)% | | Net Income | $5.1 million | $27.8 million | (81.7)% | 2025 Guidance and Capital Expenditures MDU Resources affirmed its 2025 EPS guidance and outlined a multi-year capital expenditure plan 2025 Guidance MDU Resources affirmed its full-year 2025 diluted EPS guidance of $0.88 to $0.98, based on normal operating conditions - The company affirmed its 2025 earnings per share guidance to be in the range of $0.88 to $0.98[4][11] - Guidance is based on the following key assumptions for the rest of the year: - Normal weather, economic, and operating conditions - Electric and natural gas customer growth continuing at 1%-2% annually - No equity issuances[13] Capital Expenditures The company outlined a $3.064 billion capital expenditure plan for 2025-2029, with $536 million estimated for 2025 Estimated Capital Expenditures (2025-2029 Total) | Business Line | 2025 Est. (in millions) | 2025-2029 Total Est. (in millions) | | :--- | :--- | :--- | | Electric | $154 million | $1,178 million | | Natural gas distribution | $310 million | $1,410 million | | Pipeline | $72 million | $476 million | | Total | $536 million | $3,064 million | - The capital program is subject to ongoing review and modification. Actual expenditures may differ from estimates due to changes in load growth, regulatory decisions, and other factors[19] Financial Statements This section details consolidated statements of income, selected cash flows, and other key financial data Consolidated Statements of Income Q1 2025 income from continuing operations increased to $82.5 million, while total net income decreased due to the Everus spinoff Consolidated Statements of Income (Unaudited, In millions) | | Three Months Ended March 31, | | :--- | :---: | :---: | | | 2025 | 2024 | | Operating revenues | $674.8 | $588.2 | | Operating income | $112.8 | $96.6 | | Income from continuing operations | $82.5 | $74.7 | | Discontinued operations, net of tax | ($0.5) | $26.2 | | Net income | $82.0 | $100.9 | Selected Cash Flows Information Q1 2025 saw increased net cash from operating activities, decreased investing cash use, and significantly increased financing cash use Selected Cash Flows (Unaudited, In millions) | | Three Months Ended March 31, | | :--- | :---: | :---: | | | 2025 | 2024 | | Net cash provided by operating activities | $217.5 | $165.1 | | Net cash used in investing activities | ($94.8) | ($117.3) | | Net cash used in financing activities | ($130.1) | ($35.5) | | Cash, cash equivalents and restricted cash - end of period | $59.5 | $89.3 | Other Financial Data As of March 31, 2025, the company's book value per share was $13.42, with a capital structure of 55.6% equity and 44.4% debt Financial Position as of March 31, 2025 | Metric | Value (in millions) | | :--- | :--- | | Book value per common share | $13.42 | | Total assets | $6,961 million | | Total equity | $2,743 million | | Total debt | $2,194 million | | Capitalization Ratios: | | | Total equity | 55.6% | | Total debt | 44.4% |