RGC RESOURCES INC Q3 FY2024 earnings call

• Mountain Valley Pipeline (MVP) is in service, with gas flows starting in mid-June and initial delivery into Roanoke Gas system. Restoration of MVP right of way is ongoing. - Main extensions and renewals for the first 9 months of 2024 fiscal year totaled 4.6 miles, with 478 new services connected and 319 renewed. - Interim rates went into effect July 1 under the February 2 filed rate case. SAVE and RNG rider updates are pending before the commission.

Delivered gas volumes in the third quarter were 6% lower than last year due to warmer weather. CapEx spending for the first 9 months of fiscal 2024 totaled $16.6 million, down from $19.4 million in the same period last year. Third quarter operating income decreased $240,000 or 13% to $1.6 million. Net income in the third quarter was $160,000 compared to $690,000 in the same quarter last year. Year-to-date, net income was $11.6 million or $1.15 per diluted share through 9 months of fiscal '24, better than the $10.3 million or $1.04 per diluted share in fiscal '23.

• For full year 2024, the upper end of the EPS range is kept at $1.16 per share, with the lower end moved up $0.02 to $1.12. - No EPS guidance provided for 2025 yet; drivers include rate case outcome, inflation, interest rates, and Mountain Valley cash flows.

• Cost pressures, particularly for personnel and professional costs. - Higher interest rates impacting floating rate debt. - Uncertainties in rate case outcomes. - Weather impact on earnings, such as warmer weather leading to lower gas volume demand.

Q: Congrats on Mountain Valley getting flows into service territory. Is the first customer in Franklin County within the Summit View Business Park?

A: It is, approximately 1,500 feet from the gas station in the park, and working closely with the county to bring it to fruition.

Q: Are you seeing increased inquiries now that gas is flowing?

A: There are steady inquiries from economic development prospects, changing the tone of inquiries with MVP now completed.

Q: What was the negative weather impact to earnings for '24 through winter heating season?

A: In the firm load, there was no significant negative earnings impact, and weather normalization allows adjustment back to normal weather.