FOLSOM, N.J., Oct. 24, 2001 – South Jersey Industries reported record total earnings per share of $1.51, or $17.6 million, for the 9-month period ended September 30, 2001, compared with $1.29 per share, or $14.7 million, for the prior year period.
For the third quarter, SJI’s net loss narrowed to $.32 per share, or $3.8 million, compared with a loss of $.36 per share, or $4.1 million, for the same period last year. “SJI remains on track to report another year of record earnings and to exceed First Call earnings expectations for 2001,” stated Charles Biscieglia, chairman, president and CEO of SJI. “I am particularly gratified that we have been able to maintain strong, positive momentum in the face of significant economic weakness in the national economy.”
Non-utility operations produced pre-tax earnings of $9.4 million during the first nine months of 2001, more than doubling the $4.1 million earned in 2000. For the quarter, pre-tax earnings increased 21 percent to almost $500,000. The largest contributors year to date to this performance were our wholesale and retail gas marketing operations. For the quarter, wholesale gas sales, energy services activities and our meter reading business were the primary contributors to non-utility earnings.
SJI’s utility operations generally produce a third quarter loss as natural gas usage is minimal during the non-heating months of July, August and September. The pre-tax loss for both the third quarters 2001 and 2000 was $6.7 million. Improved margins and lower interest rates experienced during the quarter were offset by increases in our reserve for uncollectable accounts, carrying costs on higher customer receivable balances related to last winter’s high gas prices and increased depreciation expenses due to ongoing system expansion.
As of September 30, 2001, South Jersey Gas’ total customer base was 284,240, an increase of 5,745 customers from the prior year. System expansion and related increases in total customers will positively impact utility profits as consumers begin heating their homes again in the fourth quarter.
For the first nine months of 2001, utility pre-tax earnings totaled $21.4 million, compared with $22.5 million in 2000. Earnings for the first nine months were primarily impacted by factors occurring early in the year such as timing differences resulting in lower contributions from off-system sales, increased depreciation expenses and certain non-recurring interest expenses.
The increase in the reserve for uncollectable accounts taken in the third quarter was also a factor.
The timing differences that impacted earnings from off-system sales for the 9-month period were due to the way these revenues are shared between the utility and its rate payers.
Before the effect of SJG’s sharing formula, pre-tax earnings from off-system sales increased $4.3 million over the prior year period. Interest expense rose primarily as a result of the need to finance higher natural gas costs during the first quarter.