Edit Symbol List
Enter up to 25 symbols separated by commas or spaces in the text box below. These symbols will be available during your session for use on applicable pages.
Don't know the stock symbol? Use the
Symbol Lookup tool.
Alphabetize the sort order of my symbols
Investing just got easier…
Sign up now to become a NASDAQ.com member and begin receiving instant notifications when key events occur that affect the stocks you follow.Access Now
AmeriGas Partners LP (APU)
Q1 2019 Earnings Conference Call
February 6, 2019 9:00 A.M. ET
Brendan Heck - Director, Investor Relations
Ted Jastrzebski - Chief Financial Officer, UGI Corporation
Hugh Gallagher - President and Chief Executive Officer, AmeriGas Propane
John Walsh - President and Chief Executive Officer, UGI
Conference Call Participants
Shneur Gershuni - UBS
Sharon Lui - Wells Fargo
Dennis Coleman - Bank of America Merrill Lynch
Chris Sighinolfi - Jefferies
Previous Statements by APU
» Amerigas Partners LP (APU) CEO Hugh Gallagher on Q4 2018 Results - Earnings Call Transcript
» Amerigas Partners LP (APU) CEO Jerry Sheridan on Q3 2018 Results - Earnings Call Transcript
» AmeriGas Partners (APU) Q2 2018 Results - Earnings Call Transcript
» AmeriGas Partners (APU) Q1 2018 Results - Earnings Call Transcript
Brendan Heck, Director of Investor Relations, you may begin your conference.
Thanks Denise. Good morning, everyone, and thank you for joining us. With me today are Ted Jastrzebski, CFO of UGI Corporation; Hugh Gallagher, President and CEO of AmeriGas Propane; and John Walsh, President and CEO of UGI.
Before we begin, let me remind you that our comments today include certain forward-looking statements, which management believes to be reasonable as of today's date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict. Please read our earnings release and our annual report on Form 10-K for an extensive list of factors that could affect results.
We assume no duty to update or revise forward-looking statements to reflect events or circumstances that are different from expectations. We'll also describe our business using certain non-GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures are available in the appendix of our presentation.
Now, let me turn the call over to John.
Thanks, Brendan. Good morning, and welcome to our call. I hope that you've all had a chance to review our press releases reporting first quarter results for UGI and AmeriGas. UGI AmeriGas delivered a solid Q1 performance while facing some challenging operating conditions. Weather was somewhat colder than prior year for each of our domestic businesses, but significantly warmer than the prior year for UGI International.
In addition to the weather challenges in Europe, we didn’t see a recurrence of the severe cold weather in the mid-Atlantic that closed out Q1 Fiscal 2018. That severe cold last year resulted in volatility that enabled to us to deliver incremental capacity margins that didn’t re-occur in the first quarter this year. I’ll review our key activities in Q1, then turn over to Ted who will provide you with a detailed overview of UGI’s financial performance in the quarter, Hugh will review Q1 for AmeriGas, and I’ll wrap up with an update on our strategic initiatives.
Our Q1 GAAP EPS was $0.36, while our adjusted EPS was $0.81. Our adjusted EPS fell short of the record adjusted Q1 fiscal 2018 EPS of $1.01. Both quarters have been adjusted for the mark-to-market evaluation of unsettled hedges and other items, which Ted will cover later. The shortfall in adjusted EPS versus our record performance last year is attributed to one-time favorable tax impact in Q1 fiscal 2018, the challenging weather conditions in Europe, and the lack of incremental capacity margin opportunities in our Midstream business.
Before I turn the call over to Ted, I like to comment on the noteworthy progress we made on a number of projects and activities. Our teams maintained their focus on meeting critical commitments to our customers and the communities we serve, while also ensuring that our new capital projects and acquisitions meet or exceed their performance targets. There were major developments in a number of fronts in Q1 that provide a strong foundation for future growth.
Our Steelton LNG storage and vaporization facility is fully online for the fiscal 2019 season. We’re continuing to see strong LNG demand in mid-Atlantic and New England, driven by increased peak day demand for most gas LDCs. These LDCs faced significant challenges due to capacity constraints in Eastern Northeast. Our growing LNG network positions as well for future growth and I’ll come back to that network investment later in the call.
Our energy services team closed on the acquisition of South Jersey Energy’s gas marketing business. This business was a great pick with our existing gas marketing activities in the mid-Atlantic and expanded our commercial and small industrial customer base in this very attractive market. We’re really pleased with the team from South Jersey that has joined UGI and they work closely with our UGI team to ensure a very smooth transition for the South Jersey Energy customers.
Our Utilities had a productive quarter, adding about 4,500 new heating customers, while executing a broad range of infrastructure replacement and reinforcement projects across our service territories. Our infrastructure replacement program for cast iron and bare steel remains on schedule with roughly 62 miles of pipeline replaced during calendar year 2018.
The combined focus of infrastructure replacement in customer growth has resulted in records levels with capital spend. We expect CapEx for the utilities to be close to $400 million in fiscal 2019. AmeriGas had a strong quarter with Adjusted EBITDA up 8.5% year-on-year. We benefitted from colder weather than Q1 fiscal 2018, improved unit margins and continued strong volume growth in East and National Accounts. Hugh will comment in much more detail on AmeriGas’ Q1 performance in a few minutes.
Our international business was faced with weather that was substantially warmer than last year. Weather in Europe has been warmer than normal for the past 9 months and the summer was unusually dry. Q1 volumes for international were approximately 9% below prior year due to the warmer weather and much lower seasonal demand for grain dry. We’re encouraged by the improving more seasonal weather pattern that has now moved across Europe and by the drop in LPG cost over the past 60 days.