UGI (UGI) Q3 2024 earnings summary

Executive summary

• Q3 FY24 adjusted diluted EPS was $0.06, up from $0.00 last year, with GAAP diluted EPS at $(0.23), reflecting improved operating performance and significant cost reductions.

• Year-to-date adjusted diluted EPS reached $3.22, up from $2.81, with GAAP diluted EPS at $2.52, driven by strong natural gas and international segment performance.

• UGI International delivered a 43% increase in adjusted EPS and generated $140 million in free cash flow year-over-year.

• Portfolio optimization continued with the sale of the Swiss LPG business, exit from European energy marketing, and an agreement to divest the Hunlock Creek power facility.

• Sixth annual ESG report released, highlighting a 50% reduction in Scope 1 emissions and early achievement of supplier diversity goals.

Financial highlights

• Available liquidity at quarter-end was $1.9 billion, including cash and credit facilities.

• Operating and administrative expenses reduced by $54 million year-to-date and $38 million year-over-year.

• Absolute debt reduced by $300 million since the start of fiscal 2023; total debt now below $7 billion.

• Year-to-date capital expenditures were $511 million, with 77% allocated to regulated utilities and Midstream/Marketing.

• Net cash provided by operating activities was $1,031 million for the nine months, up from $857 million in the prior year.

Outlook and guidance

• Fiscal 2024 adjusted EPS guidance range reaffirmed at $2.70–$3.00.

• Q4 expected to see typical seasonal earnings decline, with cost reductions and wind-down of European energy marketing providing some offset.

• Repairs to the Norgal jetty in France expected to have immaterial impact in FY24, but could impact FY25 EPS by $0.05–$0.08.

• Targeted EPS growth rate of 4–6% for FY24–27, with a targeted leverage ratio of 3.5–4.0x.

• The company expects to have sufficient liquidity to support long-term commitments and ongoing operations.