RGC Resources(US:RGCO)2024-12-05 15:18Financial Data and Key Metrics Changes - In Q4 2024, net income was $141,000 or $0.01 per share, down from $1 million or $0.10 per share in Q4 2023, reflecting lower earnings from the investment in MVP and higher interest costs [13][14] - For the full fiscal year 2024, net income grew by $462,000 to $11.8 million or $1.16 per share, compared to $11.3 million or $1.14 per share in fiscal 2023 [15] Business Line Data and Key Metrics Changes - Capital spending for fiscal 2024 totaled $22.1 million, down from $25.3 million in the previous fiscal year, primarily due to reduced spending on the RNG facility [11][12] - Delivered gas volumes in Q4 2024 were 5% lower compared to Q4 2023, attributed to warm weather and lower commercial volumes [9] Market Data and Key Metrics Changes - The company expects to receive final approval for a rate case settlement that allows for an increase of $4.08 million in annual revenue, reflecting a return on equity (ROE) of 9.9% [6] Company Strategy and Development Direction - The company is focused on growth opportunities in Franklin County, leveraging the operational capacity of the Mountain Valley pipeline, which can transport up to 2 billion dekatherms a day [18][22] - A capital spending plan of $21.6 million for fiscal 2025 is in place, with investments aimed at expanding the distribution system and supporting new customer connections [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth potential in the Roanoke Valley and Franklin County, citing strong housing growth and ongoing medical complex expansions [20][35] - The company is addressing inflationary pressures and interest rate fluctuations, with a cautious outlook on expenses [26][30] Other Important Information - The board approved an annual dividend increase of just under 4% to $0.83, aligning with the company's operational success [33] - The company anticipates modest contributions from RGC midstream in 2025, estimating cash flow of approximately $3.2 million from the joint venture [30][32] Q&A Session Summary Question: What are the current flows for MVP given the cold weather? - Management indicated that the pipeline is mostly full, with flows between 1.5 Bcf to 2 Bcf a day [40] Question: Are there any changes regarding the expansion post-election? - Management noted that energy policy may become more favorable under the new administration, potentially accelerating expansion processes [42][44] Question: Will cash from MVP be reinvested in expansions? - Management confirmed that while covering interest costs is a priority, there are opportunities for reinvestment in expansions [45][47] Question: What is the rate base number for the Roanoke rate order? - The rate base was around $200 million, with total estimates between $210 million to $220 million [55][56] Question: What are the equity needs going forward? - Management stated that they feel well-capitalized in the regulated utility and do not anticipate a large equity infusion for 2025 [75]