UGI (US:UGI)2021-11-19 16:50Financial Data and Key Metrics Changes - UGI Corporation achieved record earnings with GAAP EPS of $6.92 and adjusted EPS of $2.96, an 11% increase from the previous year [4][5] - The company reported a 34th consecutive year of increasing dividends, with a 7.2% dividend growth rate and a 7.7% EPS growth rate over the past decade [5] - Adjusted diluted EPS for fiscal 2021 was $2.96 compared to $2.67 in the prior year, with significant adjustments related to commodity price changes and transformation initiatives [17][18] Business Line Data and Key Metrics Changes - UGI International delivered record performance, benefiting from normal weather conditions and strong margin management [5][9] - AmeriGas reported a $12 million increase in EBIT, despite a 2% decline in retail volume due to COVID-19 impacts [22] - The Natural Gas business reported EBIT of $190 million, up from $168 million in fiscal 2020, driven by improved margins and capacity management [25] Market Data and Key Metrics Changes - Average wholesale propane prices in the U.S. increased by approximately 97% compared to fiscal 2020, while UGI International saw a 52% increase in Europe [18] - The PA gas utility added over 12,000 new residential and commercial heating customers, contributing to core market volume growth [26] Company Strategy and Development Direction - The company aims to continue reliable earnings growth, invest in renewable energy solutions, and rebalance its portfolio towards a more equal split between LPG and Natural Gas [6][15] - UGI is committed to a 55% reduction in Scope 1 greenhouse gas emissions by 2025 and has established partnerships for renewable natural gas production [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth prospects and the ability to maintain momentum from 2021 into 2022 [6][31] - The fiscal 2022 guidance for adjusted EPS is projected to be in the range of $3.05 to $3.25, reflecting expected reliable earnings growth [27][30] Other Important Information - The company has a strong liquidity position with $2.2 billion available, which is approximately $700 million more than the prior year [27] - UGI's transformation initiatives are expected to yield over $150 million in annual benefits by the end of fiscal 2022 [11] Q&A Session Summary Question: Did the SEC inquiries lead to a change in accounting practices? - Management acknowledged awareness of inquiries during the creation of the new instrument and confirmed a shift to the If-Converted Method for accounting, impacting FY2021 results by $0.03 [35] Question: How much unutilized capacity exists on the Midstream System? - Management confirmed excess capacity on the acquired Columbia Midstream System and expressed ongoing interest in Midstream investments [36][37] Question: How is the company managing margins in the global LPG business? - Management stated that margin management remains strong, with a hedging process in place to adjust prices according to commodity costs [39] Question: Has volatility in European gas markets impacted the International Gas Marketing business? - Management confirmed that the business model locks in margins, and recent commodity cost increases have led to substantial mark-to-market gains [42][43] Question: How is GHI positioned for scalability in renewable projects? - Management expressed confidence in GHI's capabilities to handle upcoming projects and highlighted a commitment to invest over $1 billion in renewable energy [45]