UGI (US:UGI)2021-02-04 19:47Financial Data and Key Metrics Changes - UGI Corporation reported Q1 GAAP EPS of $1.44 and adjusted EPS of $1.18, slightly above the prior year's adjusted EPS of $1.17 despite warmer weather conditions [9][20][19] - Reportable segments EBIT was $414 million, down from $419 million in the prior year [15][16] - Year-to-date cash provided by operating activities grew by 28% compared to the same period last year, with available liquidity of $1.5 billion [18][19] Business Line Data and Key Metrics Changes - AmeriGas reported EBIT of $141 million, down from $165 million in the prior year, primarily due to 8.2% warmer weather and COVID-19 impacts [24][30] - UGI International achieved EBIT of $136 million, up from $100 million in fiscal 2020, benefiting from strong crop drying and heating-related bulk volumes [26][29] - Midstream and marketing reported EBIT of $59 million, roughly flat compared to the prior year despite warmer weather [29] Market Data and Key Metrics Changes - The A Cylinder Exchange program at AmeriGas saw a 25% increase in total volumes compared to the same period last year, driven by changing consumer habits due to the pandemic [12] - UGI Utilities added over 3,900 new heating customers, indicating growth in the customer base [13] Company Strategy and Development Direction - UGI announced the acquisition of Mountaineer Gas Company, the largest LDC in West Virginia, to expand its gas utilities business [6][34] - The company is investing in renewable natural gas projects, including a utility-scale project in Idaho and a partnership for bioLPG in Europe, to enhance its ESG efforts [7][55][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges posed by warmer weather and the pandemic, highlighting the strength of its diversified business model [5][21] - The company expects the full-year impact of COVID-19 to remain within the previously estimated $0.10 range [20][58] Other Important Information - UGI has paid common dividends for 136 consecutive years and raised its dividend for the last 33 years [19] - The company is focused on long-term infrastructure replacement programs and expects to establish new record levels of replacement spending in fiscal '21 [14] Q&A Session Summary Question: Why was the AmeriGas business total margin down year-over-year despite cylinder volume increases? - Management indicated that weather was the primary factor impacting volume, coupled with COVID-19's effects on specific segments like commercial volumes [66][67] Question: Can you provide details on the bioLPG partnership in Europe? - The partnership involves converting bioethanol to bioLPG, with potential for small-scale projects across various markets, including the Nordic countries [70][71] Question: What are the expected returns on renewable natural gas investments? - Management is targeting returns that support long-term earnings growth, with positive early indications from renewable solutions investments [92] Question: Will the cylinder exchange business see lasting impacts post-pandemic? - Management believes consumer habits have changed, leading to sustained demand for outdoor dining and cylinder exchange services [94][95]