Wed, May 7, 7:01 PM (8 days ago)
**RGC Resources, Inc. (RGCO) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** Total operating revenues increased by 12% for both the three and six months ended March 31, 2025, driven by higher non-gas base rates and increased delivered volumes. - **Profit Margins:** Gross utility margin increased by 12% for the three months and 10% for the six months ended March 31, 2025, primarily due to new non-gas base rates and higher SAVE revenues. - **Cash Flow:** Net cash provided by operating activities increased by $10.6 million for the six months ended March 31, 2025, due to higher net income and cash distributions from the LLC. - **Earnings Changes:** Net income increased by $1.2 million for the three months and $1.5 million for the six months ended March 31, 2025, primarily due to higher non-gas base rates. **Quarterly Performance Discussion:** - **Revenue Growth:** The increase in total operating revenues was primarily due to the implementation of a non-gas base rate increase, along with higher delivered volumes, gas costs, and SAVE revenues. - **Cost Management:** Operations and maintenance expenses remained consistent with the same period last year. Depreciation expense increased by 6%, consistent with an increase in utility property balances. - **Interest Expense:** Interest expense increased by 4% for the three months and 6% for the six months ended March 31, 2025, primarily due to higher borrowing levels. - **Income Tax Expense:** Income tax expense increased by 22% for the three months and 13% for the six months ended March 31, 2025, corresponding to an increase in pre-tax income. **Trends & Uncertainties:** - **Weather Impact:** The Company's business is seasonal in nature, and volatility in winter weather can impact the effectiveness of the Company's rates in recovering its costs and providing a reasonable return for its shareholders. - **Regulatory Matters:** The Company is subject to regulation from the SCC, which oversees the terms, conditions, and rates charged to customers for natural gas service. - **Debt Obligations:** The Company has refinanced debt in the past and is currently in discussions with lenders concerning refinancing the debt. Management believes discussions to date have been positive and that MVP's successful operation supports the likelihood of refinancing. **Future Operations Impact:** - **Capital Expenditures:** The Company is continuing its focus on SAVE infrastructure replacement projects and extending the natural gas distribution system within its service territory. - **Debt Service:** The Company is actively discussing refinancing options for its line of credit obligations due in fiscal 2026. - **Cash Distributions:** The Company expects to receive similar quarterly distributions from the LLC going forward, which will be used to pay interest and other expenditures related to Midstream. **Ticker:** RGCO **Full Name:** RGC Resources, Inc.