Unitil Corporation Reports Mixed Q3 Results, Net Income Up Despite Revenue Decline

Unitil Corporation, a public utility holding company based in Hampton, New Hampshire, reported its financial results for the third quarter and the first nine months of fiscal year 2024, reflecting significant changes in revenue and profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, Unitil's total operating revenue was $92.9 million, a decrease of $11 million (10.6%) from $103.9 million in the same period of 2023. This decline was primarily driven by a reduction in electric revenue, which fell to $62.5 million from $72.1 million, a decrease of $9.6 million (13.3%). Gas revenue also saw a slight decline, dropping to $30.4 million from $31.8 million (4.4%). For the nine months ended September 30, 2024, total operating revenue was $367.3 million, down from $427.5 million in 2023.

Despite the revenue decline, Unitil reported a GAAP net income of $31.5 million for the nine months ended September 30, 2024, an increase of $1.8 million compared to $29.7 million in the same period of 2023. However, net income for the third quarter was negligible at $11 thousand, down from $1.4 million in the prior year. Adjusted net income for the third quarter was $32.1 million, up from $29.7 million in 2023, indicating improved profitability when excluding certain costs.

The company's gross margin for the third quarter was $33.9 million, slightly down from $34.6 million in 2023. The electric gross margin decreased to $22.3 million, while the gas gross margin fell to $11.8 million. However, adjusted gross margins showed improvement, with electric adjusted gross margin rising to $29.7 million and gas adjusted gross margin increasing to $23.3 million.

Unitil's operating expenses for the third quarter decreased to $87.1 million from $95.9 million in 2023, primarily due to a significant reduction in the cost of electric sales, which fell by $10.1 million (23.5%) due to lower wholesale electricity prices. Operating and maintenance expenses increased by $0.7 million, reflecting higher labor and utility operating costs.

Strategically, Unitil is in the process of acquiring Bangor Natural Gas Company for $70.9 million, with financing planned through a mix of short-term loans, equity, and private placement debt. This acquisition is pending regulatory approval. Additionally, the company has been actively involved in various regulatory proceedings, including rate increases and compliance with renewable energy standards.

As of September 30, 2024, Unitil's total assets were reported at $1.737 billion, with total liabilities and capitalization amounting to the same figure. The company continues to maintain a strong capital structure, with total common stock equity increasing to $502.2 million from $479.6 million a year earlier.