UGI Corporation Quarterly Report for the Period Ended March 31, 2024
UGI Corporation’s financial report highlights the company’s financial performance for the quarter ended March 31, 2024, including condensed consolidated balance sheets, statements of income, comprehensive income, cash flows, and changes in equity. The report also discusses market risk and control procedures. Legal proceedings and risk factors are also addressed.
Company Overview
UGI Corporation is an energy services holding company that operates regulated gas and electric utilities and distributes and markets energy products and services. The company has four main business units:
- Utilities - Regulated natural gas and electric distribution utilities serving over 700,000 customers in Pennsylvania and West Virginia
- Midstream & Marketing - Engages in energy marketing, trading, and storage activities
- UGI International - Distributes liquefied petroleum gases (LPG) and markets natural gas and electricity outside the U.S.
- AmeriGas Propane - Distributes propane and propane equipment in the U.S.
Financial Highlights
For the second quarter of fiscal year 2024, UGI reported net income of $496 million compared to $110 million in the prior year quarter. Adjusted net income was $423 million compared to $363 million in the prior year quarter.
The increase was driven by the Utilities and Midstream & Marketing segments, partially offset by a decrease from the AmeriGas Propane segment.
As of March 31, 2024, UGI had $1.7 billion of liquidity, including cash and available borrowing capacity. The company has no debt maturities in the next twelve months.
Utilities Segment
The Utilities segment’s adjusted net income increased by $12 million compared to the prior year quarter.
- Higher revenues were driven by rate increases for the Pennsylvania Gas Utility and Mountaineer Gas.
- Margin increased by $25 million due to the rate increases and growth in customers.
Midstream & Marketing Segment
The Midstream & Marketing segment’s adjusted net income increased by $54 million over the prior year quarter.
- Margin increased by $41 million, primarily due to higher natural gas marketing and peaking activities.
- Expenses decreased due to lower salary, benefits, and maintenance costs.
UGI International Segment
The UGI International segment’s adjusted net income was comparable to the prior year quarter at $91 million.
- Margin decreased slightly as lower energy marketing activities were largely offset by higher LPG margins.
- Expenses decreased due to lower personnel and maintenance costs.
AmeriGas Propane Segment
The AmeriGas Propane segment’s adjusted net income decreased by $36 million compared to the prior year quarter.
- Retail propane volumes decreased 6% due to customer attrition and warmer weather.
- Margin decreased slightly despite higher unit margins.
- Expenses decreased due to lower advertising and personnel costs.
Cash Flows & Financing
- Operating cash flow for the six months ended March 31, 2024 was $641 million compared to $424 million in the prior year period.
- The company paid dividends of $0.375 per share and has declared a dividend of the same amount for the third quarter of fiscal 2024.
- The company issued $250 million of senior notes at the Utilities segment and repaid other borrowings. UGI has no debt maturities in the next twelve months.
Outlook
UGI expects to maintain sufficient liquidity and remain in compliance with debt covenants despite ongoing volatility in energy markets. The company plans to continue to invest in utility infrastructure upgrades and renewable energy projects. UGI believes its diverse mix of strategically located assets positions it well to create long-term shareholder value.
