• Adjusted Diluted Earnings Per Share (EPS): $1.63 for Q4, $5.39 for full year 2024.
• Capital Investment: $356 million in 2024, at the upper end of the guidance range of $300 to $360 million.
• Adjusted Gross Margin: $567 million for full year 2024, up 25% from 2023.
• Adjusted Net Income: Approximately $122 million for full year 2024, up 24% from 2023.
• Florida City Gas Contribution: $89 million in 2024 adjusted gross margin.
• Customer Growth: Added over 4,000 new customers in Delmarva and 6,700 in Florida in 2024.
• 2025 Capital Expenditure Guidance: $325 to $375 million.
• Equity to Total Capitalization Ratio: 48.4% at the end of 2024.
• Dividend Growth: 8.5% annual growth in 2024.
• 2025 EPS Guidance: $6.15 to $6.35 per share, indicating a 16% growth rate.
• Regulated Energy Segment Gross Margin: Approximately $439 million in 2024, up 32% from 2023.
• Unregulated Energy Segment Gross Margin: Approximately $128 million in 2024, up 6% from 2023.
• Liquidity: Total available liquidity of $505 million at the end of 2024.

• Warning! GuruFocus has detected 7 Warning Signs with CPK.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Chesapeake Utilities Corp (NYSE:CPK) achieved a full year 2024 EPS of $5.39, reaching the midpoint of their guidance range.
• The company invested a record $356 million in capital in 2024, aligning with their five-year capital forecast of $1.5 to $1.8 billion through 2028.
• Florida City Gas acquisition contributed significantly, with $89 million in 2024 adjusted gross margin and 93% of FCG teammates retained.
• Chesapeake Utilities Corp (NYSE:CPK) reported a 25% increase in adjusted gross margin to $567 million, driven by infrastructure expansions and distribution growth.
• The company maintained a strong balance sheet with $505 million in liquidity and successfully issued $100 million in long-term debt at a 5.2% coupon.

Negative Points

• Warmer than normal temperatures and a delay in the finalization of the Maryland rate case posed challenges.
• Increased operating expenses, including higher insurance and vehicle expenses, partially offset margin growth by $1.52 per share.
• Interest expenses increased by $1.15 per share, impacting overall financial performance.
• The company faced dilution of $0.96 per share due to increased shares outstanding from the Florida City Gas acquisition financing.
• The integration of Florida City Gas and the implementation of the SAP customer billing system required significant organizational changes and process improvements.

Q & A Highlights

Q: How do recent executive orders and energy policies affect Chesapeake Utilities' strategic planning? A: Jeffry Householder, CEO, stated that the executive orders are generally favorable to the energy industry and do not alter Chesapeake Utilities' strategic focus. The company continues to deploy capital effectively, maintain a proactive regulatory agenda, and transform its operations to support growth.

Q: What are your thoughts on the Florida Supreme Court's oral argument regarding the RSA mechanism? A: Jeffry Householder, CEO, mentioned that while the RSA was an interesting mechanism, Chesapeake Utilities has moved on to a more traditional depreciation study for Florida City Gas. The company is seeking accelerated treatment for excess depreciation, which could be beneficial if approved.

Q: Can you explain the timing of the FERC decision on the LNG project and the subsequent filing for clarification? A: James Moriarty, EVP and General Counsel, explained that the company filed for clarification almost immediately after receiving the decision. They were also considering the pending rehearing period, and no rehearings or protests were filed, allowing them to proceed with the next phase.

Q: How did weather conditions impact the fourth quarter results, particularly for propane? A: Elizabeth Cooper, CFO, noted that while the quarter started with mild weather, the last two weeks of December were more favorable for propane, positively impacting results.

Q: What is the status of the Worcester resiliency upgrade LNG storage project? A: James Moriarty, EVP and General Counsel, confirmed that the project received FERC approval in January, and construction is on track. The storage tanks are en route, and the project is expected to be operational by the third quarter of 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.