South Jersey Industries, Inc.

NEWS RELEASE

1 South Jersey Plaza, Folsom, New Jersey 08037
Tel. (609) 561-9000 Fax (609) 561-8225 TDD ONLY 1-800-547-9085

SJI Marks Best Earnings Ever & Board Ups Dividend

    Folsom, N.J. -- South Jersey Industries, Inc. (NYSE: SJI) announced record earnings from continuing operations of $22 million or $2.01 per share for 1999. This represents a 63 percent and 61 percent improvement over 1998, respectively and an 18 percent improvement over SJI's previous per share record of $ 1.71. SJI's consolidated net income including discontinued operations improved to $1.99 per share for 1999.

    "Our financial performance is consistent with the expectations we've set for ourselves as part of a strategic plan that we successfully executed in 1999. Clearly, these results raise the bar and set a new standard from which we will build," said SJI Chairman Charles Biscieglia. "We expect nothing less than record earnings in each year ahead and believe we have the creativity, capacity and relationships to deliver on those expectations."

    Improved financial results in 1999 and confidence in SJI's ability to sustain and improve on that performance, enabled the board of directors to raise the company’s dividend by 1.4 percent. This move brings SJI's current annual dividend to $1.46 per share. The new dividend will be paid April 3, 2000 to shareholders of record at the close of business March 10, 2000.

    "In 1999, SJI shareholders realized a total return on investment of over 14 percent," Biscieglia added. "Increasing the dividend at the beginning of 2000 is a definitive step toward improving on that total return for our shareholders."

    South Jersey Gas Company, SJI's natural gas distribution subsidiary, produced record results in 1999. Key factors which impacted performance included:

• Strong Customer Growth: SJG added 6,834 new customers in 1999, a 2.6 percent increase over last year. This is the largest number of new customers added since 1990. The company continues to grow nearly twice as fast as the industry average and now serves approximately 274,000 customers in southern New Jersey.
• Improved Efficiency: O&M expenses per customer continued on a downward trend as costs were cut by 1.6 percent, following a 4.4 percent reduction in 1998. Customer costs associated with meter reading were reduced by 15 percent in 1999, through a contract with a newly formed LLC, Millennium Account Services, a joint venture of SJI and Conectiv Solutions. The full impact of these reductions will be experienced in 2000 along with an additional 5 percent unit cost reduction.
• Growing Revenue Sources: Both SJG’s Service SentryTM appliance warranty programs and non-warranty service work, continued a 2-year positive growth trend. By the end of 1999, the company had over 30,500 warranty plan customers; completed over 50,000 service calls; and saw a 430 percent increase in electric air conditioning work.
• Reduced Weather Dependency: Earnings were protected from weather that was 4.2 percent warmer than normal under a revised Temperature Adjustment Clause approved by regulators late in 1998. The revised TAC makes SJG less sensitive to weather variations providing a greater measure of earnings stability and predictability.
• Off System & Capacity Management Programs: Off system and capacity management volumes increased 31.7 percent to approximately 74.4 Bcf in 1999, generating $5.2 million in margin. These results represented a 90 percent improvement over 1998. Additionally, SJG experienced an increase in revenues associated with the completion of its largest pipeline project in the company’s history, which also benefited margins for the year.
• Improved Contracts: Increased contract demand with firm, large-volume customers grew by 6.4 percent adding $0.6 million to bottom line.

    SJI's non-utility subsidiary South Jersey Energy Company also made a positive contribution to earnings. South Jersey Energy registered its most-profitable year ever, earning $1 million and nearly doubling its previous record of $0.51 million. Factors boosting the company’s performance were:

• Increased Retail Natural Gas Sales: The company experienced a 12.8 percent increase in new deregulated commodity sales to natural gas customers and serves 83 percent of the customers, who already selected a non-utility supplier, within South Jersey Gas Company’s service territory. SJE is the leading supplier in this area.
• New Product Sales: The company's real-time environmental air quality monitoring system is now in use by two major N.J. utilities and a large electric utility in the Midwest. The product was jointly developed by the company and GZA GeoEnvironmental and has a patent pending.

    South Jersey Industries, Inc. is an energy services holding company for South Jersey Gas Company and South Jersey Energy Company. To learn more about SJI and its subsidiaries please visit http://www.sjindustries.com on the Internet.

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