The York Water Company Reports Three Months Earnings

Rhea-AI Summary

The York Water Company reported strong financial results for the first quarter of 2024, with operating revenues increasing to $17,628,000 and net income rising to $4,327,000 compared to the same period in 2023. President JT Hand highlighted the revenue growth due to rate increases and an expanding customer base, offset by higher expenses. The Company also made significant investments in infrastructure improvements and completed strategic acquisitions, positioning itself for future growth.

Positive

• Operating revenues increased to $17,628,000 in the first quarter of 2024.

• Net income rose to $4,327,000 compared to the first quarter of 2023.

• Basic and Diluted Earnings per share increased to $0.30 for the three-month period.

• The Company completed acquisitions of MESCO, Inc. wastewater assets and Longstown Mobile Estates water assets, expanding its customer base and service offerings.

Negative

• Higher operation and maintenance expenses and depreciation partially offset the revenue growth.

• The reset to zero of the Distribution System Improvement Charge (DSIC) impacted revenues for the quarter.

Insights

Financial Analyst

The York Water Company's reported increase in operating revenues and net income signifies a strong performance for the first quarter of 2024. A growth in customer base alongside an increase in rates has contributed positively to the revenue. However, the reset of the DSIC to zero serves as a note for consideration on future earnings, as such regulatory mechanisms can influence the revenue stream. The capital investment of $8.5 million in infrastructure is a strategic move that addresses long-term growth and sustainability. While this can lead to higher depreciation in the short-term, it's likely to ensure improved efficiency and reliability which can enhance customer satisfaction and support future rate cases. The acquisitions are expected to diversify and expand the company’s service coverage, potentially leading to increased market share and customer base. The additional projected investment of $33.7 million also demonstrates a commitment to the maintenance and enhancement of the company's infrastructure. Investors may appreciate the consistent dividend payout, which reflects a stable return on their investment despite the ongoing capital expenditures.

Utilities Industry Analyst

The York Water Company demonstrates a proactive approach to regulatory demands and infrastructure improvement. The Pennsylvania Public Utility Commission's DSIC mechanism is designed to allow timely recovery of costs related to infrastructure replacement. The company's ability to operate effectively within this framework, as evidenced by the revenue increase despite the DSIC reset, showcases strong management acumen. In the utilities industry, infrastructure investment is critical, not only for compliance with regulations but also for ensuring uninterrupted service. The substantial investments announced are in line with industry trends towards improving aging water systems. The Company’s growth into additional municipalities indicates an expansion strategy that could offer additional revenue streams, reinforcing its regional presence in south-central Pennsylvania. For investors, the focus on long-term infrastructure resilience can be seen as a move towards solidifying the company's market position and potentially offering greater long-term stability.

YORK, Pa., May 07, 2024 (GLOBE NEWSWIRE) -- The York Water Company's (NASDAQ:YORW) President, JT Hand, announced the Company's financial results for the first quarter of 2024.

President Hand reported that first quarter operating revenues of $17,628,000 increased $2,227,000 and net income of $4,327,000 increased $674,000 compared to the first quarter of 2023. Basic and Diluted Earnings per share of $0.30 for the three-month period increased $0.04 compared to the same period last year. Increased revenues were primarily due to an increase in rates effective March 1, 2023 partially offset by a reset to zero of the Distribution System Improvement Charge (DSIC). The DSIC is a Pennsylvania Public Utility Commission allowed charge that water utilities collect from customers for the replacement of aging infrastructure. Growth in the customer base also added to revenues. The increased revenue was partially offset by higher operation and maintenance expenses and depreciation.

During the first three months of 2024, the Company invested $8.5 million in capital projects for armoring and replacing the spillway of the Lake Williams dam, wastewater treatment plant construction, as well as various replacements and improvements to infrastructure and routine items. The Company completed the acquisitions of the MESCO, Inc. wastewater collection and treatment assets and the Longstown Mobile Estates water assets. With the MESCO acquisition, the Company now serves 56 municipalities within four counties in south-central Pennsylvania. The Company estimates it will invest an additional $33.7 million in 2024, excluding acquisitions, for completion of armoring and replacing the spillway of the Lake Williams dam, additional main extensions, wastewater treatment plant construction, and routine improvements to its pipes, service lines, and other facilities to ensure a safe, adequate, and reliable supply of drinking water and to maintain proper handling and disposal of wastewater for the Company’s growing customer base.

	Three Months Ended March 31 In 000's (except per share)
		2024				2023
Operating Revenues	$	17,628			$	15,401
Net Income	$	4,327			$	3,653
Average Number of Common Shares Outstanding		14,325				14,276
Basic and Diluted Earnings per Common Share	$	0.30			$	0.26
Dividends Declared Per Common Share	$	0.2108			$	0.2027

This news release may contain forward-looking statements regarding the Company’s operational and financial expectations. These statements are based on currently available information and are subject to risks, uncertainties, and other events which could cause the Company’s actual results to be materially different from the results described in this statement. The Company undertakes no duty to update any forward-looking statement.

FAQ

What were The York Water Company's operating revenues for the first quarter of 2024?

The operating revenues for the first quarter of 2024 were $17,628,000.

How much did the net income of The York Water Company increase in the first quarter of 2024 compared to 2023?

The net income increased to $4,327,000 in the first quarter of 2024 compared to the same period in 2023.

What acquisitions did The York Water Company complete in the first quarter of 2024?

The Company completed acquisitions of MESCO, Inc. wastewater assets and Longstown Mobile Estates water assets.