Chesapeake Utilities(CPK) - 2025 Q3 - Quarterly Results

Financial Performance - Net income for Q3 2025 was $19.4 million ($0.82 per share), up from $17.5 million ($0.78 per share) in Q3 2024, reflecting a 10.9% increase in net income year-over-year[3]. - Adjusted net income for the first nine months of 2025 was $94.9 million ($4.06 per share), compared to $84.2 million ($3.76 per share) in the prior-year period, resulting in an 8.0% growth in adjusted EPS[5]. - The company reported a 10.1% growth in net income and a 10.9% growth in adjusted EPS for the first nine months of 2025 compared to the prior-year period[5]. - Adjusted net income for Q3 2025 was $19.5 million, up from $18.1 million in Q3 2024, representing a 7.7% increase[36]. - Adjusted earnings per share (EPS) for Q3 2025 increased to $0.82 from $0.80 in Q3 2024, reflecting a 2.5% growth[36]. - For the nine months ended September 30, 2025, adjusted net income was $94.9 million, compared to $84.2 million for the same period in 2024, marking a 12.8% increase[37]. - Net income for the nine months ended September 30, 2025, was $94.2 million, up 15.0% from $81.9 million in the same period of 2024[64]. Revenue and Margin Growth - Adjusted gross margin increased by $15.2 million for Q3 2025 and $49.3 million for the nine-month period, driven by organic growth in natural gas distribution and infrastructure programs[6]. - The company generated over $20 million of gross margin from transmission, infrastructure, and transportation projects during Q3 2025[9]. - Adjusted gross margin for Q3 2025 was $137.2 million, an increase of $15.2 million or 12.5% compared to Q3 2024[19]. - For the nine months ended September 30, 2025, adjusted gross margin reached $462.4 million, up $49.3 million or 11.9% from $413.1 million in 2024[25]. - The total adjusted gross margin for nine months ended September 30, 2025, was $130.1 million, up from $115.2 million in 2024, indicating a 12.9% growth[37]. - Increased contributions from regulated infrastructure programs added $11.0 million to adjusted gross margins for the nine months ended September 30, 2025[37]. Operating Income and Expenses - Operating income for Q3 2025 was $45.0 million, reflecting a $4.1 million increase or 10.0% from the same period in 2024[19]. - Operating income for the nine months ended September 30, 2025, was $182.1 million, an increase of $20.8 million or 12.9% compared to the same period in 2024[25]. - The company experienced higher operating expenses due to increased depreciation and the absence of RSAM adjustments, which had previously provided benefits of $8.9 million in 2024[26]. - Total operating expenses for Q3 2025 were $134.6 million, up from $119.3 million in Q3 2024, marking a 12.5% increase[64]. - Operating expenses increased by $30.1 million for the nine months ended September 30, 2025, primarily due to depreciation and maintenance costs[37]. Capital Expenditures and Guidance - Capital guidance for 2025 has been increased to a range of $425 million to $450 million, reflecting ongoing investments in infrastructure and projects[10]. - The company continues to affirm its 2028 EPS guidance range of $7.75 to $8.00 per share, along with a capital expenditure guidance of $1.5 billion to $1.8 billion for the five-year period ending 2028[11]. - The Company's capital expenditures for the nine months ended September 30, 2025, were $335.6 million, with a forecasted range for 2025 capital expenditures between $425 million and $450 million[60]. Customer Growth and Consumption - The average number of residential customers served on the Delmarva Peninsula increased by approximately 4.3% for the nine months ended September 30, 2025[58]. - Average Residential Customers for Delmarva NG grew to 106,028 in Q3 2025 from 101,635 in Q3 2024, an increase of 4.0%[71]. - Average Commercial and Industrial Customers for Florida Natural increased to 8,445 in Q3 2025 from 8,322 in Q3 2024, showing a growth of 1.5%[71]. - Increased customer consumption due to colder weather conditions resulted in a $4.8 million increase in adjusted gross margin for the nine months ended September 30, 2025[54]. Regulatory and Project Updates - The company has ongoing regulatory initiatives expected to contribute $56.0 million to adjusted gross margins in 2026[40]. - The Maryland natural gas distribution businesses achieved a cumulative increase of $3.5 million in annual base rates following a settlement approved in April 2025[48]. - The Delaware natural gas division filed for a permanent rate relief of approximately $12.1 million, with annualized interim rates of $2.5 million approved in October 2024[51]. - The Florida Electric division's general base rate increase of $12.6 million was settled for a total revenue increase of approximately $8.6 million annually, effective July 2025[52]. - Major projects, including pipeline expansions, are expected to generate an estimated $46.1 million in adjusted gross margin in 2026[40]. - The Worcester Resiliency Upgrade project is projected to generate $10.2 million in adjusted gross margin in 2026 and $17.6 million in 2027[42]. - The East Coast Reinforcement Projects in Boynton Beach and New Smyrna Beach will provide an additional 15,000 Dts/day and 3,400 Dts/day of supply, respectively[43]. - Peninsula Pipeline's projects in Central Florida will add 5,000 Dts/day and 8,700 Dts/day to FPU's distribution system, with completion expected in 2024 and 2025 respectively[44]. - The renewable natural gas projects in Florida are projected to enhance FCG's gas supply and system reliability, with completion expected in the first half of 2026[45]. Equity and Debt Position - The company's equity to total capitalization ratio was approximately 49% as of September 30, 2025, as it aims to return to a target ratio of 50-60%[61]. - Stockholders' equity rose to $1,518.7 million as of September 30, 2025, up from $1,390.2 million at the end of 2024, indicating a 9.2% increase[67]. - Long-term debt (net of current maturities) increased to $1,437.9 million as of September 30, 2025, compared to $1,261.7 million at the end of 2024, reflecting a 14.0% increase[67].