Northwest Natural pany(US:NWN)2021-11-05 18:44Financial Data and Key Metrics Changes - The company reported a net income of $1.24 per share for the first nine months of 2021, a 55% increase compared to $0.80 per share for the same period last year [8] - For Q3 2021, the company reported a net loss of $20.7 million or $0.67 per share, compared to a net loss of $18.7 million or $0.61 per share for the same period in 2020 [20] - Cash provided by operating activities was $182 million, an increase of $31 million compared to last year [26] Business Line Data and Key Metrics Changes - Utility margin in the Gas Distribution segment increased by $26.2 million, driven by higher customer rates and customer growth [24] - Utility O&M expenses increased by $8.5 million, primarily due to higher employee compensation and IT system upgrades [25] - Net income from other businesses increased by $3.9 million, largely due to higher asset management revenues from the cold weather event in February [25] Market Data and Key Metrics Changes - Employment growth in the Portland Metro area has outpaced the national average, with unemployment rates declining to 4.9% compared to the national rate of 5.2% [9] - Home sales in Portland were up 15% for the first nine months of 2021 compared to 2020, with the average sale price increasing by 18% [10] - New single-family permits issued in Oregon were up 29% through September 2021 compared to last year [10] Company Strategy and Development Direction - The company launched a competitive renewable natural gas (RNG) strategy and formed a new nonregulated subsidiary, Northwest Natural Renewables, to lead in the energy transition [29] - The company aims to become a carbon-neutral utility and sees a significant long-term need for renewable natural gas [32] - The company is focused on diversifying its energy system to enhance affordability, reliability, and resilience [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the RNG market, anticipating that demand will exceed supply in the near term [34] - The company reaffirmed its 2021 earnings guidance for net income in the range of $2.40 to $2.60 per share [27] - Management highlighted the importance of resilience in energy systems, especially in light of recent severe weather events [32] Other Important Information - The company approved a dividend increase, marking the 66th consecutive year of annual dividend increases [19] - The company is actively pursuing acquisitions in its water business and has closed three tuck-in acquisitions this year [17] Q&A Session Summary Question: Discussion on returns and long-term earnings growth trajectory - Management indicated that the RNG strategy is expected to be additive to the earnings profile and will provide updates in the coming months [41][42] Question: Opportunities from Senate Bill 98 in Oregon - Management confirmed that they are focused on both regulated and unregulated RNG opportunities and are making progress on projects related to SB98 [45][47] Question: Update on hydrogen projects - Management provided an update on a hydrogen project in Eugene, Oregon, and mentioned ongoing efforts to secure funding for low-emission technology [60][62]