On August 1, 2024, California Water Service Group (CWT, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. California Water Service Group is a U.S. water and utilities holding company based in California, engaging in the production, treatment, storage, distribution, and sale of water for various uses. The company operates through regulated and unregulated subsidiaries across California, New Mexico, Washington, Hawaii, and Texas.
Q2 2024 Financial Highlights
California Water Service Group reported a significant increase in its financial performance for Q2 2024, driven by the effects of the 2021 California General Rate Case decision. The company reported earnings per share (EPS) of $0.70, significantly missing the analyst estimate of $1.12. Revenue for the quarter came in at $244.3 million, also missing the estimated $289.30 million.
Year-to-Date 2024 Financial Results
For the first half of 2024, California Water Service Group recognized $64.0 million in interim rate relief attributable to 2023, contributing to a total operating revenue of $515.0 million. This includes $18.7 million and $35.4 million attributable to the three and six months ended June 30, 2023, respectively.
Liquidity, Financing, and Capital Investment
As of June 30, 2024, the company maintained $82.7 million in cash, with $45.4 million classified as restricted. Additionally, the company had a short-term borrowing capacity of $355 million. Capital investments for the six-month period totaled $214.4 million, representing 56% of the estimated $385 million capital investment target for 2024.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Operating Revenue | $244.3 million | $194.0 million |
| Net Operating Income | $48.2 million | $15.9 million |
| Net Income | $40.4 million | $9.4 million |
| Earnings Per Share (EPS) | $0.70 | $0.17 |
Balance Sheet and Cash Flow Statement
California Water Service Group's total assets increased to $4.87 billion as of June 30, 2024, from $4.60 billion at the end of 2023. The net utility plant grew to $3.94 billion, reflecting ongoing investments in infrastructure. The company’s total equity also saw a rise to $1.55 billion, up from $1.43 billion at the end of 2023.
Strategic Initiatives and Future Plans
California Water Service Group continues to focus on strategic investments and regulatory compliance. The company has proposed a $1.6 billion investment in its California water systems over the next three years, including a Low-Use Water Equity Program to assist low-water-using, lower-income customers. This initiative aims to decouple revenue from water sales, ensuring affordability and conservation.
Commentary from Management
“I’m pleased to see the effects of the 2021 decision on our results. I’m equally pleased with our team’s effort to put together a 2024 California General Rate Case that reflects our dedication to investing diligently in infrastructure, managing expenses responsibly, and structuring rates to keep bills affordable for customers. It reflects our continuing commitment to providing a reliable, sustainable water supply for generations to come,” said Chairman and Chief Executive Officer Martin A. Kropelnicki.
Conclusion
California Water Service Group's strong financial performance in Q2 2024, driven by strategic investments and regulatory decisions, positions the company well for future growth. The company's focus on infrastructure improvements and customer affordability underscores its commitment to providing high-quality water services. For more detailed financial information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from California Water Service Group for further details.
