Mdu Resources Group, Inc. · NYSE:MDU
Mdu Resources — Q1 2020 Earnings Presentation
20 slides from Mdu Resources's earnings presentation, May 8, 2020
Slide 1: First Quarter Earnings Call
May 8, 2020 FIRST QUARTER EARNINGS CALL JASON VOLLMER Vice President, Chief Financial Officer & Treasurer
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS During the course of this presentation, we will make certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Although the company believes that its expectations and beliefs are based on reasonable assumptions, actual r
Slide 3: Mission statement
“ With integrity, create superior shareholder value by expanding upon our expertise to be the supplier of choice in all of our “ markets while being a safe and great place to work.
Slide 4: Leadership Team
LEADERSHIP TEAM A B A. Dave Goodin E. Jeff Thiede President & CEO MDU Construction Services Group President & CEO B. Jason Vollmer Vice President, CFO & Treasurer F. Trevor Hastings C D WBI Energy President & CEO C. Stephanie Barth Vice President, CAO & Controller G. Nicole Kivisto Utilities Group D
Slide 5: First Quarter Earnings
FIRST QUARTER EARNINGS EARNINGS EPS $50 $0.30 $40.9 $0.25 $40 $0.21 $0.20 $30 $25.1 millions $0.15 $0.13 $20 $0.10 $10 $0.05 $0 $0.00 2019 2020 2019 2020
Slide 6: Electric & Natural Gas Utility
ELECTRIC & NATURAL GAS UTILITY FIRST QUARTER EARNINGS Reported earnings of $43.7 million EARNINGS – $5.2 million in lower investment returns $60 $52.0 related to certain benefit plans $50 negatively impacted earnings $43.7 – Further impacting earnings were $40 decreases in both electric and natura
Slide 7: Pipeline
PIPELINE FIRST QUARTER EARNINGS Reported earnings of $7.4 million EARNINGS – Higher transportation volumes and $10 revenues from organic growth projects, and higher transportation rates from a $7.4 FERC rate case settled in 2019 had a $6.8 positive impact on the quarter – Partially offsetting the
Slide 8: Construction Services
CONSTRUCTION SERVICES FIRST QUARTER EARNINGS Reported earnings of $16.8 million EARNINGS – Earnings were impacted by a $6.7 $25 million out of period adjustment to $20.0 correct revenue recognition on a $20 construction contract in the prior year $16.8 – Higher selling, general and $15 administrat
Slide 9: Construction Materials
CONSTRUCTION MATERIALS FIRST QUARTER EARNINGS Reported a seasonal loss of $38.2 SEASONAL LOSS million – Earnings were impacted by $2.4 million $0 2019 2020 lower investment returns related to certain benefit plans and higher selling, -$10 general and administrative expense millions – Higher constr
Slide 10: Strong Financial Position
STRONG FINANCIAL POSITION Strong liquidity position – $431.8 million of available borrowing capacity Liquidity (As of March 31, 2020) – $116.5 million of cash $116.5 Available – Issued a $75 million term loan at Montana-Dakota in April to $431.8 Borrowed* provide additional financial flexibility C
Slide 11: First Quarter Earnings Call
May 8, 2020 FIRST QUARTER EARNINGS CALL DAVE GOODIN President & Chief Executive Officer
Slide 12: COVID-19 – Our Response
COVID-19 – OUR RESPONSE Our products and services considered essential – Operations permitted to proceed with increased social distancing measures for our more than 14,000 employees Health and safety of employees, customers and communities a priority – Implemented work from home policies where a
Slide 13: Electric & Natural Gas Outlook
ELECTRIC & NATURAL GAS OUTLOOK Expects to grow rate base by 5% compounded annually over the next five years Safely meet customer demand by upgrading and expanding infrastructure and facilities Customer base expected to continue growing by 1-2 percent annually Focused on timely regulatory rec
Slide 14: Pipeline Outlook
PIPELINE OUTLOOK North Bakken Expansion project – FERC application filed in February 2020 – Expected to start construction in early 2021 – Expected to be in service late 2021 Organic growth opportunities including potential industrial related projects due to low natural gas prices Profitably g
Slide 15: Construction Services Outlook
CONSTRUCTION SERVICES OUTLOOK Record quarterly revenues of approximately $515 million, up 22% from first quarter 2019 All-time record backlog of nearly $1.3 billion as of March 31, up 24% from first quarter 2019 2020 revenue guidance in a range of $1.85 billion to $2.05 billion Continues to
Slide 16: Construction Materials Outlook
CONSTRUCTION MATERIALS OUTLOOK Record first quarter revenues of $262 million, up 15% from first quarter 2019 First quarter backlog of $905 million, down slightly from the prior year’s record first quarter backlog of $943 million 2020 revenue guidance range lowered slightly to $2.1 billion to $
Slide 17: 2020 EPS Guidance Updated
2020 EPS GUIDANCE UPDATED $1.50 - $1.70 Consolidated EPS Guidance Note: As of May 7, 2020 5 - 8% Long-Term Compound Annual Growth Rate Target 17
Slide 18: Capital Expenditures
CAPITAL EXPENDITURES Electric and natural gas utility − System infrastructure upgrades and $900.00 $20 replacements $800.00 − Natural gas combustion turbine $700.00 $154 Pipeline $70 $20 $600.00 (millions) − North Bakken expansion $500.00 $304 $157 Construction materials and services $157 $400
Slide 19: Dividend Growth
DIVIDEND $0.85 GROWTH $0.83 82 consecutive years of $0.80 quarterly dividend payments Dividend increased November 2019, making 29 $0.75 Annualized Dividend $0.75 consecutive years of increases Annualized dividend $0.83 per share $0.70 Member of S&P High-Yield Dividend Aristocrats index $0.65
Slide 20: Questions
INVESTOR RELATIONS QUESTIONS