RGC Resources(US:RGCO)2022-02-08 20:01Financial Data and Key Metrics Changes - The first quarter operating income for Roanoke Gas showed a modest decline compared to the prior year's quarterly results, with gross margins increasing due to the SAVE rider and customer growth, offset by higher depreciation expense and receipt of CARES Act money in the previous year [5][6] - Consolidated earnings per share decreased to $1.08 compared to $1.38 for the prior 12 months, primarily due to a $4.6 million decline in equity and earnings from Midstream's investment in the Mountain Valley pipeline [7] Business Line Data and Key Metrics Changes - Residential volumes declined by 8% and commercial volumes declined by 5% due to significantly warmer weather in December 2021, which was 32% lower in heating degree days compared to normal [3][2] - Industrial volumes were down, primarily due to a large customer switching its primary fuel from natural gas to coal in 2020; excluding this customer, industrial volumes would have increased [3] Market Data and Key Metrics Changes - The capital spending during the first quarter of the current fiscal year is running slightly ahead of the previous year, with a focus on customer growth and system expansion, including investments in the Blue Ridge project [4][9] - The company expects to spend approximately $25 million in capital expenditures for the fiscal year, marking the largest capital spend in Roanoke Gas's 139-year history [9] Company Strategy and Development Direction - The company is focused on expanding its customer base and infrastructure, with ongoing projects such as the Blue Ridge pipeline and main extensions [11][12] - Management emphasized the importance of the Mountain Valley pipeline for future service and growth, citing the need for more natural gas infrastructure in the Eastern United States [16][17] Management's Comments on Operating Environment and Future Outlook - Management noted that despite the challenges posed by recent court decisions affecting the Mountain Valley pipeline, the long-term demand for natural gas remains strong and unchanged [17][18] - The company remains optimistic about customer growth and the economic development of the Roanoke region, which has seen significant growth over the past several years [14][16] Other Important Information - The company has started the renewal of the loan gate station, with completion expected by late summer [10] - Management indicated that the Mountain Valley pipeline project is still under review due to recent legal challenges, and further updates will be provided as more information becomes available [12][18] Q&A Session Summary Question: Guidance on volumes for the heating season - Management confirmed that December was significantly warmer than normal, impacting volumes, but January has been colder, leading to stronger delivered volumes [24][25] Question: Impact of recent court decisions on Mountain Valley pipeline - Management stated that the exact implications of the court decision are still being determined, particularly regarding work in the Jefferson National Forest [26][27] Question: Timeline for returning to the field for construction - Management indicated that construction would depend on weather conditions, with a reasonable expectation for work to resume in April if conditions improve [27]