Aug 07, 2021

Rising energy earnings point to economic recovery

Energy
Earnings
Oil
USA
Dominic Ellis
4 min
Leading energy companies have been posting quarterly earnings and balance sheets broadly point to economic recovery

Leading energy companies have been posting quarterly earnings and operations updates, and balance sheets broadly point to improving economic recovery, rising energy demand and growth in renewables as the industry strives to meet net zero targets.

Dominion Energy announced an unaudited net income determined in accordance with Generally Accepted Accounting Principles (reported earnings) for the three months ended June 30, of $285 million ($0.33 per share) compared with a net loss of $1.2 billion ($1.52 per share) for the same period in 2020.

Operating earnings for the three months ended June 30, 2021, were $628 million ($0.76 per share), compared to operating earnings of $630 million ($0.73 per share) for the same period in 2020. GAAP earnings relative to operating earnings reflect the mark-to-market impact of economic hedging activities, unrealised changes in the value of our nuclear decommissioning trust fund, the contribution from Questar Pipelines, and other adjustments.

Duke Energy unveiled second-quarter 2021 reported EPS of $0.96, and adjusted EPS of $1.15. This is compared to a reported loss per share of $(1.13) and adjusted EPS of $1.08 for the second quarter of 2020.

Adjusted EPS excludes the impact of certain items that are included in reported EPS. The difference between the second-quarter 2021 reported and adjusted EPS is due to workplace and workforce realignment costs and exit obligations from gas pipeline investments. Higher second-quarter 2021 adjusted results were led by growth in Electric Utilities and Infrastructure from rate case contributions, higher volumes and higher wholesale earnings.

“Our strong second-quarter results demonstrate the continued execution of our clean energy strategy,” said Lynn Good, Duke Energy chair, president and chief executive officer. “We recently passed 10,000MW of renewable energy on our path to net-zero carbon emissions by 2050."

Boralex posted EBITDA(A) of $106 million ($117 million)(1) in Q2-2021, up 23% (10%) from $86 million ($107 million) in Q2-2020, and discretionary cash flow of $149 million for the last 12 months, $7 million more than for the prior period. Total production was up 41% (22%) from Q2-2020 with Wind production rising 33% (12%) from Q2-2020, although Hydroelectric production was down 13%.

The second quarter was marked by the addition of 743MW to its project pipeline, including in solar energy and energy storage markets in the United States, according to Patrick Decostre, President and Chief Executive Officer. 

Sempra announced Q2 earnings of $424 million, or $1.37 per diluted share, compared with Q2 2020 earnings of $2.239 billion, or $7.61 per diluted share. 

Earnings for the first half of 2021 were $1.298 billion, or $4.24 per diluted share, compared with earnings of $2.999 billion, or $9.91 per diluted share, in the first six months of 2020. Trevor Mihalik, Executive Vice President and Chief Financial Officer, said it was pleased with its "solid" year-to-date results.

Cimarex Energy Co reported net income of $113.4 million for Q2, and generated cash flow from operating activities of $364 million. On May 24, Cimarex announced it will combine with Cabot Oil & Gas Corporation in an all-stock merger. 

Talos Energy was among the companies in the red, reporting net Loss of $125.8 million, inclusive of $186.6 million in commodity hedging losses, although it posted record production of over 66 MBoe/d for the second quarter in a row as well as an adjusted EBITDA margins of over $36 per Boe.

President and Chief Executive Officer Timothy S. Duncan said: "The second quarter is typically our most capital intensive quarter as we take advantage of our best weather offshore, and the projects executed in the second quarter and early third quarter have laid the foundation for the second half of the year and plans for 2022."

Genie Energy recorded adjusted EBITDA of $3.1 million, versus $3.5 million in Q2 2020, with revenues up from $76.1 million to $97.7 million.

CEO Michael Stein said it is encouraged by the improvement in the marketing environment in the US and confident that it can return to previous levels of meter growth once all sales channels are fully re-opened. "Internationally, following the successful sale of our Japanese operations, we expect our remaining business to continue to drive strong growth while demonstrating improving profitability, which we believe makes GREI an attractive investment on a stand-alone basis."

CONSOL Energy posted quarterly adjusted EBITDA of $84.4 million and Q2 marked its third consecutive quarter recording approximately $50 million or more in free cash flow. Jimmy Brock, President and CEO, said: "Customer demand remains robust and we furthered our pivot to the export markets by selling approximately 55% of our total sales volume internationally."

Chesapeake Utilities Corporation's net income totalled $13.8 million, or $0.78 per share, compared to $10.7 million, or $0.64 per share, for the same quarter of 2020. Net income from continuing operations for the six months ended June 30, 2021 was $48.3 million, or $2.75 per share, compared to $39.7 million, or $2.41 per share, for the same period of 2020.

Jeff Householder, President and Chief Executive Officer of Chesapeake Utilities Corporation, said its "double digit earnings growth" was attributable to strong margin growth generated from higher consumption as volumes resumed closer to pre-pandemic levels, incremental margin from pipeline expansion projects, organic natural gas distribution customer growth, contributions from Elkton Gas and Western Natural Gas, increased retail propane margins per gallon and margin from Marlin Gas Services. 

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