Covid cools down Unitil’s 2Q earnings
Income drops as commercial gas, electric sales fall by double digits
In the first quarter of 2020, warmer weather hurt Unitil’s earnings. In the second quarter, Covid-19 kicked in.
The Hampton-based gas and electric utility reported income of $3.1 million in the second quarter, about 21 cents per share, a decrease of about $900,000. Nearly half of that decrease ($400,000, or 3 cents a share) was due to the pandemic, said CEO Tom Meissner in an earnings call held last week.
New Hampshire’s stay-at-home order hurt sales at workplaces, the utility said. Yes, usage of both gas and electricity were up at homes, but that didn’t make up for the decline in commercial sales whose margins are usually greater.
Ironically, on the expense side the virus helped the utility by reducing healthcare costs, as employees – the company said that it had no active infections – cut back on other medical procedures. That more than offset other expenses, such purchase of personal protective equipment and provision for bad debt, since emergency orders prevented utility shutoffs when customers couldn’t pay their bills.
Here are some of the coronavirus-related facts: The amount of gas sold fell 10.7% among commercial and industrial customers. It was also down 2.1% at residences, but that was primarily due to a warm spring. On a weather-normalized basis, commercial sales were down 7.4% and up 3.2% at residences.
The story is the same concerning electric usage, only more so. Commercial sales were 11% and residential sales were up 12.8%. If you take weather into account, sales were down 12.2% commercially and 6.4% residentially.
The company saved $1 million in benefit costs due to Covid-19, primarily because of to lower medical costs, though it paid about $400,000 on PPE supplies, facility cleaning costs and higher debt provisions. Unitil didn’t release any figures relating to unpaid bills, but said it is tracking that situation.