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FOLSOM, N.J. -- South Jersey Industries reported record net income from continuing operations of $20 million or $1.73 per share for the first quarter of 2001, compared with $19.1 million or $1.69 per share for first quarter 2000. Earnings per share including discontinued operations for the recent quarter totaled $1.72, compared with $1.68 in the first quarter of 2000.
SJI's non-utility operations contributed $4.7 million in pretax earnings in the first quarter of 2001, compared with $2.5 million during the first quarter of 2000. The increase is primarily due to effective management of natural gas portfolios, storages, and pipeline assets within the company's wholesale and retail natural gas marketing operations during a period of high volatility in natural gas commodity prices.
Based upon first quarter results, Charles Biscieglia, SJI's chairman, president and CEO expects non-utility operations to provide up to 15 percent of the company's net income in 2001.
"SJI's true growth engine going forward is in our non-utility operations. Our goal is for these businesses to provide 20 percent of net income beyond 2003," said Biscieglia. "The utility will always be the backbone of SJI's earnings but the growth opportunities in our non-utility businesses for energy, energy-related services and air monitoring are value creators for the short and the long term."
SJI's natural gas utility subsidiary, South Jersey Gas, saw customer growth rise sharply in the first quarter. South Jersey Gas reported having 283,944 customers as of March 31, 2001, compared with 276,088 at the same time last year. The company attributes the rise to new home construction boosted by favorable interest rates, a healthy local economy, and increased heating system conversions from oil and electricity to natural gas.
The positive benefits of customer growth and increased seasonal natural gas use were offset by two factors during the quarter. Off-system natural gas sales generated record margins in the first quarter of $9.1 million, a 19 percent increase over the same period last year. However, due to timing issues related to the utility's sharing formula, contributions to net income from off-system sales were lower in the first quarter of 2001 than in the first quarter of 2000. Under an approved regulatory formula, margins from off-system sales are apportioned between South Jersey Gas and its customers. South Jersey Gas' customers benefited by $6.0 million under this formula in the first quarter of 2001.
Also impacting utility performance were interest expenses associated with financing high levels of natural gas costs. This issue was recently resolved as South Jersey Gas received regulatory approval to collect under-recovered gas costs, plus carrying costs, over a three-year period. This method of recovery shields customers from sudden price spikes by spreading out the costs over time. The utility does not profit on this recovery since natural gas purchased for customers is a pass-through charge.
Webcast & Conference Call
SJI will hold an open conference call and webcast to discuss its first quarter 2001 results today at 11a.m. Eastern. To participate in the call, dial 1-800-360-9865 approximately 10 minutes ahead of the scheduled time. To listen to the live webcast, simply visit the South Jersey Industries website at http://www.sjindustries.com and click the webcast icon. A recorded version of the webcast will be available at SJI's website following the call. A rebroadcast will also be available by phoning 1-800-428-6051 and entering the code: 180330.
South Jersey Industries (NYSE: SJI) is an energy services holding company for South Jersey Gas and South Jersey Energy. To learn more about SJI and its subsidiaries please visit http://www.sjindustries.com on the Internet.
This release contains forward-looking statements about SJI's financial performance. The statements are made in good faith and deemed reasonable at the date of this release. Actual results may vary and SJI encourages you to conduct your own research before making any investment decisions including a review of SJI's Annual Report to Shareholders and Form 10K for a complete discussion of risks and/or uncertainties that may cause actual results to vary.