EnergySouth, Inc. reports fiscal 2008 second quarter earnings and announces increase in annual dividend
May 02 2008 - 5:39PM
Business Wire
EnergySouth, Inc. today reported earnings for the fiscal quarter
ended March 31, 2008 of $6,271,000, or $0.77 per diluted share, as
compared to net income for the quarter ended March 31, 2007 of
$6,831,000, or $0.85 per diluted share. Net income for the six
month periods ended March 31, 2008 and 2007 was $10,358,000, or
$1.27 per diluted share, and $11,445,000, or $1.42 per diluted
share, respectively. The decrease in earnings of $0.08 and $0.15
per diluted share for the three- and six- month periods,
respectively, was driven by the expansion of the Company�s
midstream operations. Earnings from the Company�s midstream
operations for the quarter ended March 31, 2008 were $0.09 per
diluted share, a decrease of $0.11 per diluted share as compared to
the same period last year. Earnings for the six months ended March
31, 2008 decreased $0.18 per diluted share as compared to the same
period last year. The decrease in earnings was due primarily to
increased operating expenses incurred as a result of the continuing
expansion of the midstream operations. The Company acquired assets
in Mississippi in November 2007 and is currently developing storage
caverns at that location. Expenses also increased in anticipation
of a third storage cavern in McIntosh, Alabama going into service
on April 1, 2008 which increased the storage capacity of that
facility from 6.0 Bcf to 11.4 Bcf of working gas. Additional
compressors which will serve the third cavern, as well as existing
caverns, went into service in December 2007. As such, the Company
incurred additional net interest expense of $0.04 and $0.06 per
diluted share in the current year three- and six- month periods,
respectively, that was previously being capitalized. Since the
compressors are eligible for a fifty percent additional first year
tax depreciation allowance under the Gulf Opportunity Zone Act of
2005, the Company will realize tax savings of approximately $4
million. These increases in expense were partially offset by
increased revenues from short-term storage agreements. Earnings
from the Company�s natural gas distribution business for the
quarter ended March 31, 2008 were $0.68 per diluted share, an
increase of $0.04 per diluted share as compared to the same
prior-year period. Earnings for the six months ended March 31, 2008
also increased $0.04 per diluted share as compared to the same
prior-year period. The increase in earnings was driven primarily by
a decline in operating expenses during the current-year period. The
decrease in expenses was partially offset by a decrease in margins,
defined as revenues less cost of gas and related taxes, due
primarily to a decline in consumption by temperature-sensitive
customers. Earnings from other business operations decreased $0.01
per diluted share for each of the three and six month periods ended
March 31, 2008 when compared to the same prior-year periods due
primarily to a decrease in merchandise sales and related
merchandising activities. The Board of Directors of EnergySouth,
Inc., at a meeting held April 25, 2008, declared a quarterly
dividend on the outstanding Common Stock of $0.26 per share, to be
paid July 1, 2008 to holders of record as of June 16, 2008. The new
annual rate of $1.04 per share represents a 4% increase and the
33rd consecutive year in which dividends have been increased.
EnergySouth, Inc. is a holding company which has two principal
wholly-owned subsidiaries, Mobile Gas Service Corporation and
EnergySouth Midstream, Inc. The Company�s natural gas distribution
business is conducted by Mobile Gas, which purchases, sells, and
transports natural gas to residential, commercial, and industrial
customers in Mobile, Alabama and surrounding areas. Mobile Gas also
provides merchandise sales, service, and financing. The Company�s
natural gas midstream operations are conducted by EnergySouth
Midstream, which is the general partner and 90.9% owner of Bay Gas
Storage Company, a limited partnership that provides underground
storage and delivery of natural gas. EnergySouth Midstream also
owns 60% of Mississippi Hub, LLC, a limited liability company
engaged in the construction and development of natural gas storage
caverns. EnergySouth Services, Inc. is a wholly-owned subsidiary of
EnergySouth Midstream engaged in natural gas marketing, trading and
risk management activities, and is the general partner of Southern
Gas Transmission Company, which is engaged in the intrastate
transportation of natural gas. � ENERGYSOUTH, INC. FINANCIAL
RESULTS (in thousands, except per share data) � Three months ended
March 31, � � � � 2008 � � � � 2007 Operating Revenues $ � � �
47,372 $ � � � 46,662 Operating Expenses $ 35,326 $ 34,173 Net
Income $ 6,271 $ 6,831 � Basic Earnings Per Common Share $ 0.77 $
0.86 � Diluted Earnings Per Common Share $ 0.77 $ 0.85 � � Six
months ended March 31, 2008 2007 Operating Revenues $ 83,244 $
85,591 Operating Expenses $ 63,266 $ 64,104 Net Income $ 10,358 $
11,445 � Basic Earnings Per Common Share $ 1.28 $ 1.44 � Diluted
Earnings Per Common Share $ 1.27 $ 1.42
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