UGI (US:UGI)2022-05-05 18:24Financial Data and Key Metrics Changes - UGI reported adjusted EPS of $1.91 for Q2 2022, a decrease from $1.99 in the prior year [7][14] - Adjusted EBIT for reportable segments was $631 million, consistent with the previous fiscal year [7][15] - The company expects adjusted EPS for fiscal 2022 to be within a revised guidance range of $2.90 to $3 [7][28] Business Line Data and Key Metrics Changes - AmeriGas reported a $12 million decrease in EBIT compared to the prior year, with retail volume declining by 8% [17][20] - UGI International's EBIT decreased to $120 million from $149 million in the prior year, despite a 2% increase in retail volumes [21][22] - The utility segment reported EBIT of $194 million, an increase of $52 million from the prior year, driven by higher volumes and base rate increases [26] Market Data and Key Metrics Changes - The LPG business at UGI International implemented price increases to mitigate higher commodity costs [10] - The company experienced significant increases in volatility in natural gas and power prices, particularly after geopolitical events [23] Company Strategy and Development Direction - UGI is focused on reliable earnings growth, targeting 6% to 10% EPS growth and 4% dividend growth [36] - The company is pursuing a renewables strategy, including agreements to purchase and distribute renewable LPG and investments in renewable energy projects [11][12] - A strategic review of the energy marketing business is underway, with options including potential exit from the business [31][44] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the business amid a dynamic macroeconomic and geopolitical environment [6][34] - The company anticipates recovering nearly half of the energy marketing loss by the end of the fiscal year due to price increases and cost control actions [30][43] - Management expressed confidence in the ability to manage costs and improve margins moving forward [45][46] Other Important Information - UGI's available liquidity at quarter-end was $1.9 billion, up from $1.6 billion in the prior year [27] - The Board of Directors increased the quarterly dividend to $0.36 per share, marking the 138th consecutive year of dividend payments [27] Q&A Session Summary Question: Can you provide more detail on the recovery of energy marketing losses? - Management indicated that they expect to recover approximately half of the $80 million loss in EBIT attributed to the energy marketing business by implementing price increases and cost control measures [41][43] Question: What is the average remaining contract life for existing full requirement contracts in energy marketing? - Contracts typically have a duration of 2 to 3 years, with the company ceasing to sign new contracts [52][53] Question: How should we view the new FY '22 guidance in relation to long-term growth targets? - The new guidance of $2.90 to $3 is considered a base for long-term growth commitments, with historical growth rates still applicable [47][48]