Evergy(EVRG) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported first quarter adjusted earnings of $0.54 per share, unchanged from the previous year [5][27] - Retail demand grew by 2.7%, while heating degree days increased by 18%, but margin benefits were limited due to declining block pricing [6][28] - The company reaffirmed its 2025 adjusted EPS guidance range of $3.92 to $4.12 per share, with a midpoint of $4.02 per share [7][37] Business Line Data and Key Metrics Changes - The recovery of regulated investments contributed $0.13 to EPS, while higher depreciation and interest expenses reduced EPS by $0.10 [28] - Total demand grew by 2.7%, but weather-normalized demand decreased by 3% due to a large industrial customer outage [29][30] Market Data and Key Metrics Changes - The company has a robust customer pipeline, with a backlog of growth opportunities expanding to 12.2 gigawatts [13] - The company anticipates significant demand growth from large customers like Meta and Panasonic, contributing approximately 500 megawatts by 2029 [36] Company Strategy and Development Direction - The company aims for long-term earnings growth of 4% to 6% through 2029, supported by strong demand from new customers and regulatory frameworks [7][37] - The integrated resource plan reflects an all-of-the-above strategy for new generation development, adding approximately 2.1 gigawatts of new generation from 2025 through 2035 [17][18] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the midpoint of EPS targets despite a slower start to the year, citing strong operational performance and cost management [31][37] - The company remains committed to investing in infrastructure to support growth while ensuring reliability and affordability for customers [24][25] Other Important Information - Recent legislative outcomes in Kansas and Missouri are expected to enhance regulatory frameworks and support infrastructure investment [10][11] - The company is in advanced discussions with customers representing approximately three gigawatts of load, indicating significant interest in the region [15] Q&A Session Summary Question: Clarification on quarterly performance and expectations - Management clarified that the first quarter came in 5 cents below expectations before mitigating actions, with a base outlook for the full year at $3.97 [41][43] Question: Timing of large load contracts - Management indicated that the timing for the 1.3 gigawatts of load is likely linked to finalizing large load power service tariff proceedings, expected to conclude by year-end [45][47] Question: Impact of sales growth on equity - Management noted that increased load growth could significantly reduce equity needs, potentially saving hundreds of millions of dollars over the five-year period [55] Question: Coal plant retirement rationale - Management discussed the rationale for extending coal plant retirement timelines, emphasizing the age and maintenance needs of older units [75][77] Question: Operational and maintenance levers - Management highlighted the ability to manage operational and maintenance costs to meet guidance, ensuring reliability while maintaining flexibility [79][82] Question: Large load tariff discussions - Management confirmed the importance of constructive outcomes in tariff discussions for attracting large customers and spreading fixed costs [87][91]