MDU Resources (US:MDU)2026-02-05 13:32Financial Performance - Net income for 2025 was $190.4 million, with earnings per share of $0.93, down from $281.1 million and $1.37 in 2024 respectively [3]. - Income from continuing operations increased by $10.3 million year-over-year to $191.4 million [5]. - Net income for Q4 2025 was $76.3 million, up 38.2% from $55.2 million in Q4 2024, and for the full year, net income decreased to $190.4 million from $281.1 million in 2024, a decline of 32.3% [30]. - The electric business reported Q4 2025 net income of $18.0 million, a 5.3% increase from $17.1 million in Q4 2024, while full-year net income decreased to $64.9 million from $74.8 million, a decline of 13.2% [34][35]. - The natural gas distribution business reported a net income of $37.0 million in Q4 2025, up from $29.4 million in Q4 2024, primarily due to higher retail sales revenue and lower operation and maintenance expenses [38]. - For the full year 2025, the natural gas distribution business net income increased to $56.1 million from $46.9 million in 2024, driven by rate relief in multiple states, despite higher operation and maintenance expenses [39]. - The pipeline business reported a net income of $18.8 million in Q4 2025, down from $20.5 million in Q4 2024, mainly due to lower demand for customer storage services and higher depreciation expenses [41]. - For the full year 2025, the pipeline business net income slightly increased to $68.2 million from $68.0 million in 2024, supported by growth projects and higher demand for transportation contracts [42]. - Other reported a net income of $2.5 million in Q4 2025, compared to a net loss of $11.8 million in Q4 2024, primarily due to improved results from discontinued operations [45]. - For the full year 2025, Other reported a net income of $1.2 million, a significant decrease from $91.4 million in 2024, mainly due to the absence of income from discontinued operations [46]. Revenue and Expenses - Operating revenues for Q4 2025 were $534.0 million, a slight decrease of 0.3% from $535.5 million in Q4 2024, while total operating revenues for the year increased to $1,875.1 million from $1,758.0 million, representing a growth of 6.7% [30]. - Natural gas distribution operating revenues for Q4 2025 were $393.0 million, down 3.3% from $406.5 million in Q4 2024, but increased for the year to $1,283.5 million from $1,201.1 million, a growth of 6.9% [37]. - Operating income for the electric segment in Q4 2025 was $21.9 million, a 5.8% increase from $20.7 million in Q4 2024, while full-year operating income decreased to $79.6 million from $94.2 million, a decline of 15.5% [33][34]. - The total operating expenses for the pipeline business increased by 3.7% to $30.8 million in Q4 2025, and by 9.2% to $128.1 million for the full year 2025 [41]. Capital Investment and Future Outlook - For 2026, the company expects earnings per share to be in the range of $0.93 to $1.00, with a capital investment plan of approximately $560 million [4][18]. - The company plans a capital investment of approximately $3.1 billion for 2026-2030, targeting a 60%-70% annual dividend payout ratio [22]. - The Minot Expansion Project, placed in service on November 1, 2025, adds approximately seven million cubic feet per day of natural gas transportation capacity [17]. - MDU Resources anticipates customer growth of 1%-2% annually, with a long-term EPS growth rate of 6%-8% [22]. Asset and Equity Information - The company's total assets as of December 31, 2025, were $7,622 million, with total equity of $2,773 million and total debt of $2,677 million [49]. - The book value per common share was $13.57, with a market price per common share of $19.52, resulting in a market value as a percent of book value of 143.8% [49]. Operational Metrics - The utility rate base grew by 16.0% year-over-year, including the 49% ownership stake in Badger Wind Farm [5]. - Electric utility earnings decreased by $9.9 million year-over-year, totaling $64.9 million, primarily due to higher operation and maintenance expenses [10]. - Natural gas distribution earnings increased by $9.2 million year-over-year to $56.1 million, driven by rate relief across multiple jurisdictions [11]. - The pipeline segment achieved record earnings of $68.2 million, benefiting from increased transportation revenue and customer demand for short-term firm capacity contracts [16]. - Interest expense for the year was $107.7 million, slightly down from $108.3 million in 2024, indicating stable financing costs despite operational changes [30]. - The average cost of electric fuel and purchased power per kWh increased to $0.025 in Q4 2025 from $0.021 in Q4 2024, while the average cost of natural gas per dk decreased to $5.86 from $6.04 in the same period [33][37]. - The company completed a $264.6 million payment for a 49% ownership interest in Badger Wind Farm, which was placed in service on December 31, 2025 [32].