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South Jersey Industries Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: February 28, 2012 04:24PM
South Jersey Industries Inc. (SJI) filed Annual Report for the period ended 2011-12-31. South Jersey In has a market cap of $1.64 billion; its shares were traded at around $52.69 with a P/E ratio of 20.1 and P/S ratio of 1.8. The dividend yield of South Jersey In stocks is 3%. South Jersey In had an annual average earning growth of 4.6% over the past 10 years.
Highlight of Business Operations:Throughput - Utility - Total gas throughput increased 17.3 MMdts, or 15.6%, from 2010 to 2011. This increase was realized primarily in the Capacity Release markets. Capacity Release increased 17.1 MMdts during 2011, as compared with 2010, as a result of increased opportunity for such sales. Additional capacity became available during the latter part of 2010 as capacity previously transferred out of SJG under the provisions of the Conservation Incentive Program (CIP) was returned to the utility. Firm throughput decreased 1.7 MMdts, or 3.0%, during 2011, compared with 2010, as a result of 7.8% warmer weather, partially offset by customer growth. The Company added 3,579 customers over the twelve month period ended December 31, 2011, which represents a growth rate of 1.0%.
SJE's revenues from retail gas operations, net of intercompany transactions, decreased by $12.2 million, or 10.9%, in 2011, compared with 2010. Excluding the impact of the net change in unrealized gains/losses recorded on forward financial contracts of $0.2 million due to price volatility, revenues decreased $12.0 million. This decrease was due mainly to an 8.0% decrease in the average monthly NYMEX settle price and the impact of SJE exiting the residential market in October of 2011. SJE's residential contracts were at higher fixed prices reflective of market conditions from two years ago when the recently expired program was established. The majority of SJE's other natural gas customer contracts are market-priced. As of December 31, SJE was serving the following number of retail gas customers:
This decrease in revenues is mainly attributable to a 61.6% decrease in sales of storage volumes, which are shown gross in the statement of operations, along with an 8% decrease in the average monthly NYMEX settle price, partially offset by a 31.4% increase in total sales volumes. As discussed in Note 16 to the consolidated financial statements, revenues and expenses related to the energy trading activities of SJRG are presented on a net basis in Operating Revenues - Nonutility.
SJE's revenues from retail gas operations, net of intercompany transactions, increased by $4.4 million, or 4.1%, in 2010, compared with 2009 due mainly to volumetric growth of 13.1% and a 10.8% increase in the average monthly NYMEX settle price. The majority of SJE's natural gas customer contracts are market-priced. As of December 31, SJE was serving the following number of retail gas customers:
SJI has entered into certain contracts to buy, sell, and transport natural gas and to buy and sell retail electricity. For those derivatives not designated as hedges, we recorded the net unrealized pre-tax gain (loss) of $5.4 million, $(22.6) million and $(14.8) million in earnings during the years 2011, 2010 and 2009, respectively, which are included with realized gains and losses in Operating Revenues - Nonutility. The fair value and maturity of these energy-trading contracts determined under the mark-to-market method as of December 31, 2011 is as follows (in thousands):
Stocks Discussed: SJI,