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PHONE: 609-561-9000
MEDIA CONTACT: JOANNE BRIGANDI x4240
INVESTOR CONTACT: STEPHEN CLARK x4260
October 28, 2003
SJI Posts Strong Third Quarter Performance Improvement
Delivers Nine Month Record Earnings
FOLSOM, N.J. -- South Jersey Industries (NYSE:SJI) delivered a $0.14 per share improvement in earnings from continuing operations for the third quarter. Commenting on SJI's third quarter results, Charles Biscieglia, Chairman and CEO of SJI, said, "Consistent execution of our strategy has enabled SJI to deliver strong earnings performance for not only the third quarter and first nine months of 2003, but the last five years as well.
The results of the first nine months of 2003 keep SJI on track to deliver the earnings per share growth for the year of at least the 7% to 10 % that we outlined previously," continued Biscieglia. SJI's earnings from continuing operations for the first nine months of 2003 were a record $23.2 million or $1.87 per share compared with $17.2 million, or $1.44 per share for 2002.
Although SJI typically produces a loss in
the third quarter when natural gas usage is minimal, the company was able to
minimize its third quarter loss from continuing operations to $1.6 million,
or $0.13 per share. This compares favorably with a loss of $3.2 million, or
$0.27 per share, for the same period in 2002.
Third Quarter 2003 Highlights:
Non-Utility Operations Net Income Increases
Net income contribution for the quarter from our non-utility business increased to $2.2 million due to strong performance in our wholesale energy marketing and on-site energy production businesses. These results were partially offset by lower than targeted comparative net income posted by our retail gas marketing business.
South Jersey Resources Group, SJI's wholesale energy marketing business, increased its contribution to SJI's net income to $1.2 million for the third quarter of 2003, a $1 million increase over the prior year period. The profit increase resulted from effectively managing storage and pipeline capacity rights while serving the growing needs of our wholesale customer base.
Marina Energy, SJI's on-site energy production business, contributed almost $700,000 to earnings for the quarter, due in large part to the July commencement of full operations at our thermal energy plant serving the Borgata Hotel Casino & Spa in Atlantic City, N.J. Since start-up, operation of the plant has exceeded our expectations for the facility.
South Jersey Energy, SJI's non-regulated energy supplier, had 90,300 residential, commercial and industrial customers at the end of the third quarter of 2003 compared with 66,400 at the end of the same period in 2002, a 36% increase. SJE added almost 1,900 customers during the third quarter of 2003. Net income performance for the quarter at our retail gas marketing business was approximately $190,000 lower than the same period last year. However, the large customer increase experienced over the last year should significantly benefit fourth quarter 2003 results.
Utility Operations
Continued Strong Customer Growth Fuels Utility
At South Jersey Gas Company, our regulated utility, a larger customer base, lower interest expenses and a 10% performance improvement from our appliance service business offset the effects of increased administrative expenses that include health and pension costs. Because natural gas usage for heating is typically minimal in the third quarter, expenses associated with serving customers exceed revenues earned from those customers. The utility net loss for the quarter of $3.8 million mirrored third quarter 2002 results.
Fueled by new construction and conversions from other energy sources, SJG's customer total climbed to 299,600 at September 30, 2003, an increase of 7,900 over the same period last year. The 2.7% customer growth is well above the industry average of 1.5%. We continue to project that customer growth will be close to 3% for the full year based upon the strength of development in our service territory. Customer growth contributes significantly to annual profitability.
SJG took advantage of historically low interest rates by issuing $110 million of long-term debt during the quarter at an average weighted interest rate of 4.97% and with an average life of 17 years. Proceeds of the debt were used to repay short-term borrowings outstanding under existing lines of credit. Those short-term line borrowings were incurred to temporarily finance the expansion of SJG's gas distribution system and to redeem high rate debt. During the quarter we called $32 million of 6.95% First Mortgage Bonds, the refinancing of which will provide an earnings benefit for the remainder of 2003, 2004 and beyond.
Webcast and Conference Call Details
South Jersey Industries President and COO, Edward J. Graham, will host an open conference call and webcast to discuss the company's third quarter 2003 earnings on Tuesday, October 28, 2003 at 11:00 a.m. EST. To participate in the conference 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 of the conference call will also be available by calling 1-800-428-6051 and entering the code: 309287. SJI encourages shareholders, media and members of the financial community to attend the conference call and/or listen to the webcast.
South Jersey Industries (NYSE: SJI) is an energy services holding company for South Jersey Gas, South Jersey Energy, South Jersey Resources Group and Marina Energy. Visit http://www.sjindustries.com for more information about SJI and its subsidiaries.
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. SJI assumes no responsibility to update this information. Actual results may vary and SJI encourages you to conduct your own research before making any investment decisions including a review of SJI's second quarter 2003 SEC Form 10Q for a discussion of risks and/or uncertainties that may cause actual results to vary.
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