New Jersey Resources(NJR) - 2026 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported NFE of $118.2 million or $1.17 per share for the quarter, reflecting disciplined execution and solid performance across its businesses [31] - The fiscal 2026 NFEPS guidance was raised by $0.25 to a range of $3.28-$3.43 per share, marking the sixth consecutive year of raising guidance [24][33] - The company expects to invest approximately $5 billion over the next five years, representing a 40% increase compared to the previous five years [6][15] Business Line Data and Key Metrics Changes - New Jersey Natural Gas is positioned for high single-digit rate-based growth through 2030, with significant investments directed towards safety and reliability [7][8] - Storage and Transportation (S&T) is expected to more than double NFE by 2027, driven by favorable recontracting of both Adelphia and Leaf River [6][28] - Clean Energy Ventures (CEV) expects to grow in-service capacity by more than 50% over the next two years, with a strong project pipeline [10][30] Market Data and Key Metrics Changes - The utility is expected to contribute approximately 70% of fiscal 2026 NFEPS, complemented by earnings growth from CEV and S&T [15][33] - New Jersey Natural Gas achieved record send-outs during extreme cold weather, highlighting the critical nature of its services [25][23] Company Strategy and Development Direction - The company emphasizes consistency in execution and targeted capital deployment to support long-term growth [5][6] - A healthy balance sheet is maintained with no need for block equity issuance to execute on its capital plan [6][15] - The company is focused on affordability and energy efficiency programs to help customers manage costs [26][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by rising electric utility costs and expressed commitment to working with the new administration to address these issues [18][34] - The company remains optimistic about its growth prospects, supported by a disciplined capital investment strategy and a solid balance sheet [7][10] Other Important Information - The company marked 30 consecutive years of dividend increases, underscoring confidence in its long-term plan [12] - The company has a proactive approach to securing natural gas supplies, with over 87% hedged for the winter season [26] Q&A Session Summary Question: Can you discuss the potential for further upside in energy services due to weather events? - Management indicated that the guidance issued was based on results to date and could not incorporate future weather events [39] Question: Can you confirm contracts for the capacity expansion at Leaf River and discuss potential for further growth? - Management confirmed contracts for initial capacity expansion but noted that the fourth cavern expansion does not yet have contracts [40][41] Question: How does the evolving regulatory backdrop affect affordability efforts and future rate case filings? - Management emphasized ongoing efforts to drive affordability and stated there are no immediate needs for new regulatory processes [46] Question: What is the outlook for Clean Energy Ventures in light of recent regulations? - Management expressed optimism about permit reforms and the ability to accelerate development of safe-harbored assets [48] Question: Can you provide insights on the solar pipeline outside of New Jersey? - Management noted that about 50% of forward-looking projects are outside New Jersey and emphasized the importance of regulatory friendliness in those markets [59] Question: How does the hedging strategy benefit customers, and is it recognized by regulators? - Management confirmed that regulators are aware of the benefits of the hedging strategy, which helps mitigate costs for customers [68]