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CH Energy Group Posts 2006 Earnings Results
(Poughkeepsie, NY) Annual earnings for CH Energy Group, Inc. (NYSE:CHG) totaled $2.73 per share in 2006, versus the $2.81 per share posted during 2005. Milder weather and customer conservation were the two primary reasons for the 8-cent decline in year-over-year results.
"Despite growth in the number of customers during 2006, our delivery volumes were noticeably reduced across all the forms of energy we deliver: electricity, natural gas, fuel oil, gasoline, diesel fuel and propane," reported Steven V. Lant, Chairman of the Board, President and C.E.O. The combination of milder weather compared to 2005 and customer sensitivity to commodity costs resulted in lower energy use per customer, he explained.
The annual earnings by business segment were as follows:
Central Hudson Gas & Electric Corporation
Central Hudson's contribution to annual earnings was $2.15, which was 5 cents lower than that of 2005. The impact of a cooler summer and warmer winter and increased expenses associated with storm activity combined to decrease earnings by 35 cents during the course of the year, and customer conservation resulted in an additional 12-cent decline. Elements from an expired regulatory agreement, increased revenues resulting from a new three-year rate agreement, growth in the number of customers and the sale of unused property helped to offset the sales declines and increased expenses.
Griffith Energy Services
The Griffith fuel distribution businesses contributed 10 cents to earnings per share in 2006, down from 23 cents per share in 2005, due largely to reduced usage per customer resulting from warmer weather during the heating season and sensitivity to higher energy prices. "It's important to note the earnings contribution from our acquisition strategy -- as well as our success in attracting new customers in 2006 due to our internal marketing efforts -- helped to offset the impacts of lower sales per customer," Lant said. He also noted that Griffith benefited from expanding margins experienced within the industry during 2006.
Other Businesses
Holding company CH Energy Group, Inc. and CHEC partnerships and other investments posted 48 cents toward corporate earnings in 2006, up from 38 cents in 2005. The 10-cent increase was largely attributable to earnings from ownership stakes in the Cornhusker ethanol facility and the Lyonsdale Biomass plant, as well as increased interest income and the release of reserves related to a former subsidiary.
4th Quarter 2006 Results
Consolidated basic earnings per share for the quarter ended December 31, 2006, were 62 cents, compared to the 74 cents posted during the final quarter of the previous year. The decrease of 12 cents is largely attributable to the impact of warmer weather and customer conservation in both the utility and fuel distribution business segments.
2007 Earnings Projections
"We already know that the impact of this winter's unseasonably warm weather will carry over into 2007 results, and have lowered our annual earnings projection as a result. We're estimating that the mild weather that occurred during December 2006 and the first half of January 2007 will dampen results by about 10 cents per share," Lant said.
CH Energy Group projects its 2007 consolidated annual earnings will total between $2.40 and $2.65 per share, which reflects the milder weather that occurred in late 2006 and early 2007. Earnings expectations for individual business units were projected as follows: $1.80 – $1.90 per share from regulated utility Central Hudson Gas & Electric Corporation; 20 – 25 cents per share from Griffith fuel distribution; and 40 – 50 cents per share from holding company CH Energy Group, Inc., partnerships and other investments.
About CH Energy Group, Inc.
With more than 450,000 customers, CH Energy Group, Inc. is a family of companies seizing new opportunities in the energy marketplace through two primary subsidiaries: Central Hudson Gas & Electric Corporation is a regulated transmission and distribution utility serving approximately 367,000 customers in eight counties of New York State's Mid-Hudson River Valley, and delivering natural gas and electricity in a 2,600-square-mile service territory that extends from the suburbs of metropolitan New York City north to the Capital District at Albany. Central Hudson Enterprises Corporation, a non-regulated subsidiary, is the umbrella for a family of energy-related companies and investments focused primarily on fuel distribution and renewable energy. Griffith Energy Service's fuel distribution business supplies energy products and services to more than 85,000 customers in seven states, stretching from Connecticut to the Washington, D.C. area. CHEC also has interests in a Lexington, Neb., ethanol plant, two wind power projects, and a biomass plant in upstate New York.
Conference Call: Mr. Lant will conduct a conference call with investors to review financial results at 2:00 p.m. (ET) today, February 14, 2007. Dial-in: 1-866-205-3921; Conference Name: “CH Energy Group.” Supplemental materials are available here to assist participants in following the Conference Call presentation. A digitized replay of the call will be available from 7:15 p.m. (ET) on February 14, 2007, until 11:59 p.m. (ET) on February 21, 2007, by dialing 1-800-475-6701 and entering access code #861558. In addition, the call will be webcast live in listen-only mode and available for replay for approximately 30 days within the Investor Relations section of the Company’s Web site at www.CHEnergyGroup.com.
Forward-Looking Statements
Statements included in this news release, including documents incorporated by reference that are not historical in nature, are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by words including "anticipates," "believes," "projects," "intends," “estimates," "expects," "plans," "assumes," "seeks," and similar expressions. Forward-looking statements including, without limitation, those relating to CH Energy Group, Inc. and its subsidiaries' future business prospects, revenues, proceeds, working capital, liquidity, income and margins, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to several important factors including those identified from time to time in the forward-looking statements. Those factors include, but are not limited to: weather; energy supply and demand; fuel prices; interest rates; potential future acquisitions; developments in the legislative, regulatory and competitive environment; market risks; electric and gas industry restructuring and cost recovery; the ability to obtain adequate and timely rate relief; changes in fuel supply or costs; the success of strategies to satisfy electricity requirements now that Central Hudson's major electric generation assets have been sold; future market prices for energy, capacity, and ancillary services; the outcome of pending litigation and certain environmental matters, particularly the status of inactive hazardous waste disposal sites and waste site remediation requirements; and certain presently unknown or unforeseen factors, including, but not limited to, acts of terrorism. CH Energy Group, Inc. and its subsidiaries undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Given these uncertainties, undue reliance should not be placed on the forward-looking statement
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