UPDATE: UGI Corp. (UGI) Tops Q1 EPS by 8c, Revenues Miss

(Updated - February 3, 2021 5:35 PM EST)

UGI Corp. (NYSE: UGI) reported Q1 EPS of $1.18, $0.08 better than the analyst estimate of $1.10. Revenue for the quarter came in at $1.93 billion versus the consensus estimate of $2.03 billion.

HEADLINES

• GAAP diluted earnings per share ("EPS") of $1.44 and adjusted diluted EPS of $1.18 compared to GAAP diluted EPS of $1.00 and adjusted diluted EPS of $1.17 in the prior-year period.
• Reportable segments earnings before interest expense and income taxes1 ("EBIT") of $414 million compared to $419 million in the prior-year period.
• Margins stronger than prior year at UGI International, continued progress on the LPG business transformation initiatives, and disciplined expense management largely offset warmer than prior-year weather at our domestic businesses and the impact of the COVID-19 pandemic.
• Through its subsidiary, UGI Energy Services, LLC ("Energy Services") entered into definitive agreements to invest in New Energy One HoldCo LLC, which is part of the team developing a utility-scale renewable natural gas (“RNG”) project in Idaho.
• On December 30, 2020, UGI announced that it had signed a definitive agreement to acquire Mountaineer Gas Company.

ESG HIGHLIGHTS

• UGI Utilities, Inc. (“UGI Utilities”) has executed a RNG interconnect agreement with a landfill gas developer in northeast Pennsylvania.
• UGI Utilities has also commenced construction on a project to deliver natural gas to UPS Fuel Services Inc., a subsidiary of United Parcel Services, Inc. (“UPS”), for a large regional fleet of compressed natural gas (“CNG”) delivery vehicles.
• On February 2, 2021, UGI International announced a new supply and development partnership with Ekobenz, a Polish technology specialist in catalytic conversion of bioethanol to bio-gasoline and bioLPG, for exclusive rights to its supply of bioLPG.
• On December 14, 2020, UGI Utilities and Energy Services joined the coalition Our Nation’s Energy Future (ONE Future) to further progress their commitment toward achieving UGI’s ambitious greenhouse gas emission reduction targets.
• Created a dedicated ESG function to continue advancing UGI's commitment to sustainability.
• Through its subsidiary, UGI Utilities, UGI supported programs promoting Belonging, Inclusion, Diversity & Equity (BIDE) and STEM advancement through a gift of $300,000 to Penn State Harrisburg.

"UGI delivered a strong first quarter with GAAP diluted EPS of $1.44 and adjusted diluted EPS of $1.18, despite weather that was warmer than normal in all of our service territories and the ongoing impact of COVID-19 on our operations," said John L. Walsh, President and Chief Executive Officer of UGI Corporation. "The solid results highlight the benefits of both geographic and operational diversification as the strong performance was driven by higher margins at UGI International, higher volumes from AmeriGas’ cylinder exchange program, favorable capacity management margin at our Midstream & Marketing business, continued contribution from our growth drivers and transformation initiatives, and disciplined expense management. These factors largely offset generally warmer weather in our domestic businesses and the negative impact of COVID-19 during the quarter; demonstrating the resiliency of our business.

“The LPG businesses continue to make good progress on the business transformation initiatives. Fiscal 2021 is an important year for both businesses as we begin to execute on critical aspects of the projects and continue to build a culture of continuous improvement. AmeriGas and UGI International continue to enhance operational efficiency, improve the customer experience, and remain on pace to deliver total ongoing annual benefits of more than $140 million and €30 million, respectively.

“On December 30, 2020 we announced an agreement to acquire Mountaineer Gas Company. The transaction accelerates the goal of rebalancing our portfolio and provides us with an opportunity to support our customers in West Virginia through investments that will ensure safe, reliable, affordable, and environmentally responsible natural gas services. We expect to see rate base grow by a compound annual growth rate of approximately 10% to 12% over the long term. The transaction is expected to be immediately accretive to adjusted diluted EPS and is expected to close in the second half of calendar year 2021.

“Lastly, we continue to make progress on our goal to be a leader in delivering renewable energy solutions for our customers. Recently, UGI Utilities executed a RNG interconnect agreement with a large landfill gas developer in northeast Pennsylvania and commenced construction on a project to deliver natural gas to UPS Fuel Services Inc. We also recently announced that UGI International entered into a supply and development partnership with Ekobenz and secured exclusive rights to Ekobenz’ supply of bioLPG, a renewable form of propane-butane produced from advanced bioethanol.

“We continued to make progress on key initiatives during the first quarter and remain on track to deliver on our long-term financial commitments to shareholders.”

For earnings history and earnings-related data on UGI Corp. (UGI) click here.

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