RGC Resources (RGCO) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 net income rose to $11.8 million ($1.16/share) from $11.3 million ($1.14/share) in 2023, driven by higher MVP investment earnings before its June 2024 service start.

• Q4 2024 net income was $141,000 ($0.01/share), down from $1 million ($0.10/share) in Q4 2023, due to lower MVP earnings and higher interest costs.

• Regulatory achievements included a favorable rate case settlement and new depreciation rates.

• Mountain Valley Pipeline (MVP) became operational in June 2024, enabling growth opportunities and new service areas.

• Customer growth continued, with 631 new service connections and expansion into Franklin County.

Financial highlights

• Operating revenues for fiscal 2024 were $84.64 million, down from $97.44 million in 2023, reflecting lower natural gas costs and reduced customer bills.

• Operating income for fiscal 2024 was $17.08 million, slightly down from $17.68 million in 2023.

• Equity in earnings of unconsolidated affiliate (MVP) rose to $3.85 million in 2024 from $2.08 million in 2023.

• Interest expense increased to $6.50 million in 2024 from $5.62 million in 2023, primarily due to higher rates.

• Capital expenditures totaled $22.1 million, down from $25.3 million in 2023, reflecting lower RNG facility spending.

Outlook and guidance

• Fiscal 2025 EPS forecasted at $1.18–$1.25, with modest growth expected.

• Capital spending planned at $21.6 million, focused on system investment and Franklin County expansion.

• Dividend increased nearly 4% to $0.83 annually, maintaining a comfortable payout ratio.

• RGC Midstream expected to contribute just over $3 million in cash, lower than 2024 due to end of construction-phase earnings.

• Settlement on a pending rate proceeding with SCC staff provides for a $4.08 million annual revenue increase, pending approval.