Northwest Natural Company (NWN) Q2 2024 earnings summary

Executive summary

• Reported a net loss of $2.8 million ($0.07/share) for Q2 2024, compared to net income of $1.2 million ($0.03/share) in Q2 2023, mainly due to regulatory lag, inflation, and higher expenses.

• Net income for the first six months of 2024 was $61.0 million ($1.60/share), down from $72.9 million ($2.03/share) in the same period of 2023.

• Customer base for gas and water utilities grew 1.8% over the last 12 months, adding nearly 16,000 connections, mainly from water acquisitions.

• Strategic acquisition of Puttman Infrastructure and ICH adds 4,200 customers, expands into recycled water and California markets.

• Invested nearly $200 million in utility systems in the first half of 2024 to enhance reliability and resiliency.

Financial highlights

• Q2 2024 consolidated net loss was $2.8 million, a $4.0 million decrease from Q2 2023.

• Six-month net income decreased by $11.9 million year-over-year, primarily due to lower other income, higher depreciation, and increased interest expense.

• Utility margin increased $0.4 million in Q2 and $0.9 million year-to-date, driven by customer growth and amortization of deferrals.

• Operations and maintenance expenses decreased by $3.4 million year-over-year, mainly from lower benefit and employee-related costs.

• Operating cash flow for the first six months was $246.1 million, down from $297.9 million in 2023.

Outlook and guidance

• 2024 annual earnings guidance reaffirmed at $2.20–$2.40 per share, assuming continued customer growth and average weather.

• Long-term EPS growth targeted at 4%-6% compounded annually from 2022 through 2027.

• New Oregon gas utility rates expected to be effective November 1, 2024, pending approval of a $95 million revenue increase.

• Capital expenditures for 2024 expected to be $350–$400 million, with $1.4–$1.6 billion planned over 2024–2028.

• Guidance assumes no major regulatory or legislative changes.